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Days after Kroger’s Giant Eagle deal, the harder questions come into focus
Days after Kroger’s Giant Eagle deal, the harder questions come into focus
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CLEVELAND, Ohio — Days after Kroger announced it would buy Giant Eagle with promises that little would change for shoppers, the bigger questions surrounding the deal are coming into focus — and they have less to do with the sign over the door than what happens after the deal closes.
Michael Goldberg, a Case Western Reserve University business professor, said shoppers should separate the brand promises being made now from the longer-term questions that come with a large grocery acquisition. Among the biggest questions are whether Kroger’s scale will translate into lower prices, whether less competition will leave consumers worse off, how the company will decide which local stores to keep and whether the assurances made when the deal was announced will endure after it closes.
“We don’t know yet if this is going to be bad for consumers or good for consumers,” Goldberg told cleveland.com. “But I think there’s reason to believe that either could be true.”
Kroger announced Wednesday it will acquire the 95-year-old, Pittsburgh-area grocer in a deal valued at $1.65 billion, including $1.25 billion in cash and the assumption of about $400 million in outstanding liabilities. Giant Eagle operates 197 supermarkets and 11 standalone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana.
The companies said the stores will run as a division of Kroger, keeping the Giant Eagle name and its myPerks loyalty program. Kroger, based in Cincinnati, operates thousands of stores across the country under several banners.
Will stores close?
One of the questions weighing most on Northeast Ohio may be whether local stores survive over time.
Giant Eagle CEO Bill Artman told cleveland.com Wednesday that there are no planned store closures as part of the acquisition, though the companies noted plans to sell off some Giant Eagle locations.
Goldberg said reassurances matter, but he also pointed to historical reasons for caution about whether promises made at the start of a merger hold up.
“Everybody says all the right things in the beginning,” Goldberg said, comparing the dynamic to airline mergers where carriers promise to keep hubs and flights “until they don’t.”
Over time, he said, new ownership may look at the business differently. A store that Giant Eagle kept open because of history, local relationships or long-term strategy could eventually be reviewed through another lens.
“Maybe they see some things about lower-performing stores that they process differently,” Goldberg said.
He said it is reasonable for shoppers and communities to worry about store closures, particularly in areas where losing a full-service grocery store would worsen food access problems or risk creating a food desert.
In Greater Cleveland, the deal lands differently than it might in a market where Kroger and Giant Eagle already compete. Kroger has deep Ohio roots and a large presence elsewhere in the state. But many shoppers in Northeast Ohio today have never known Kroger as the area’s go-to grocery store.
Goldberg said that lack of overlap may matter for both regulators and consumers. Chains with stores close together often face the most obvious post-merger consolidation: sell one, close one or combine operations where the companies duplicate each other.
The deal comes after Kroger’s failed attempt to merge with Albertsons, a transaction that collapsed in 2024 after the Federal Trade Commission and two states sued to block it over competition concerns and judges in two separate cases halted the merger.
Phil Lempert, a food industry analyst and founder of SupermarketGuru, told cleveland.com that he does not expect the Giant Eagle deal to face the same resistance as the Albertsons bid, citing the smaller size of the transaction and a changed regulatory environment.
The transaction is expected to close in 2027, pending regulatory approval. Kroger and Giant Eagle have said they expect to sell offa limited number of Giant Eagle stores as part of that process.
Lempert said divestitures do not necessarily mean stores disappear. In some cases, another business can buy a location and continue operating it as a grocery store, which could reshape the local market in other ways. If a lower-price competitor such as Aldi or Grocery Outlet takes over a divested store, he said, the competitive landscape around that location could change.
What shoppers may actually notice
The competitive landscape is one way that might determine whether shoppers see grocery prices rise or fall as a result of the deal. But any cost savings will be largely invisible at the checkout counter, according to Lempert, because food prices are climbing regardless. The best case, he said, is that prices rise less than they otherwise would.
Kroger’s size could help, according to Goldberg. A larger company can wield more leverage with suppliers, stronger distribution and more technology behind pricing and online shopping, all of which could help lower costs.
But Goldberg said that on the other hand, more grocery stores under the same top ownership means less competition.
The deal has been announced but not completed, and for shoppers the practical effects may come slowly.
Lempert said that if the deal follows the path of other grocery store mergers, Kroger’s private-label program will likely reach more Giant Eagle shelves. He praised Kroger’s store-brand program, citing its organic lines and a recently launched brand aimed at GLP-1 users.
Kroger also has a stronger e-commerce operation than Giant Eagle which could improve the shopping experience for some customers, Lempert said, particularly around online ordering and pickup.
MORE BY HANNAH DROWN
But some of those benefits carry the risk of eroding Giant Eagle’s regional identity over time, even though Goldberg said removing the Giant Eagle name itself would be unlikely, given the value of the brand.
For now, the deal leaves shoppers with a familiar grocery name and an unfamiliar question: whether Kroger’s ownership will preserve what people like about Giant Eagle while delivering enough benefits to justify the change.
“This could be a net benefit,” Goldberg said. “But the jury’s still out.”
Hannah Drown is cleveland.com's Lorain County reporter, covering the government decisions, economic development and community stories that directly impact residents' lives. Since joining cleveland.com in 2014,... more
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