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Merger for Albertson’s and Sprouts?

Merger for Albertson’s and Sprouts?

According to Reuter’s, Albertsons and Sprouts are considering a merger.

“…early stage discussions took place in recent weeks and involved a plan to take Sprouts private. Doing so would add the natural and organic foods-focused business to the Albertsons suite of supermarket brands, which includes Safeway, Vons and Shaw’s”.

What? Are you kidding? Albertsons owns Safeway, Von’s and Shaw’s? How did I not know or not remember that? Here’s more:

SUPERMARKET CONSOLIDATION 

An acquisition of Sprouts would underscore the consolidation sweeping the U.S. grocery industry, as regional chains struggle to compete against online retailers such as Amazon.com Inc (AMZN.O), big box stores such as Wal-Mart Stores Inc (WMT.N), and discount chains such as ALDI Inc.

Albertsons is one of the two most active industry acquirers along with The Kroger Co. (KR.N). A planned initial public offering for Albertson’s has been delayed since October 2015. At the same time, Krogers stock is up more than 140 percent over the last five years despite falling 23 percent over the previous 12 months.

Sprouts is among the niche retailers such as Fresh Market Inc and Whole Foods Market Inc (WFM.O) facing pressure from Albertson’s and Kroger, who now sell some of the same specialty and organic products at lower prices.

I’m not really sure if this is a good or bad thing. Sprouts offers us an alternative to Jimbo’s and Whole Foods (and now Lazy Acres). It helps keep competition in the marketplace. And it’s different from the other markets, with only some of the market geared towards healthy eating.

But I also can see that because more people are shopping for veggies at the Farmer’s Market these days, that there may be a need to consolidate in some ways.

Now, I’m sure that’s not true for everywhere – that people are buying more from Farmer’s Markets. But it certainly is true in Southern California. I went to take a friend to Kaiser Hospital a couple of months ago and in their courtyard? A ton of fruit and vegetable vendors. Some organic. Amazing.

We sure do live in paradise in San Diego….

Healthy Happy Eating,

 

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