DENVER (KDVR) — The planned merger between grocery giants Kroger and Albertsons could have a major impact on the way Coloradans shop for groceries.
As it stands, the new mega-chain would be the only option for many Coloradans who prefer to shop at traditional grocery stores.
“Costco’s not for everybody. And Trader Joe’s is not for everybody. And the natural foods markets are too expensive to be your primary food locations,” said Darrin Duber-Smith, a marketing professor at Metropolitan State University Denver.
Other grocers could enter the market
He said if the deal between King Soopers’ and Safeway’s parent companies goes through, some existing stores will be forced to close. However, he believes it opens the door for other chains to move into Colorado.
“So the Aldis and the Lidls started popping up in the smaller markets, so it could very well be these stores end up expanding their footprint here in Colorado,” he said.
It is possible Walmart, which is the nation’s leading grocery retailer, could also position itself to take over more of the market. Currently, Walmart holds the second-largest market share for groceries in Denver, behind Kroger.
“You have to remember that Walmart already tried this. They had what was called Walmart Neighborhood Market, and it was a miserable failure,” Duber-Smith said.
What about smaller grocery chains already in Colorado?
The proposed merger also has experts speculating about the future of smaller chains that already have a footprint in Colorado, like Trader Joe’s, Sprouts and Natural Grocers.
“We’re really looking at this as an opportunity. We’re hoping that folks maybe who haven’t shopped with us or aren’t readily familiar with us, that they will give us a shot,” said Katie Macarelli, public relations manager for Natural Grocers.
The chain started in Colorado in 1955. Today, it operates 44 locations in the state and will soon open its 45th.
“We have fabulous relationships with small vendors, small farmers. Partnerships that enable us to provide things that you might not have tried before but that you will really like and things that are local,” Macarelli said.
Store options may not replace traditional grocers
However, Duber-Smith said stores like Natural Grocers will not be able to replace Safeway and King Soopers for most families because of costs and the availability of certain products and brands.
“They’re specialty stores, and so it’ll be really hard for them to expand what they do. They would really have to change their brand identity and change who they are,” he said.
Macarelli said if Coloradans shop around, they may be surprised.
“We are an outside-the-box grocery store, but you will find things that you’re familiar with,” she said. “We are not that kind of high, nose up in the air type of thing. We really do want this to be affordable for everybody.”
She said consolidation within Colorado’s grocery market could also be an opportunity for stores like Natural Grocers to expand into new neighborhoods.
“We are certainly always looking at ways to grow but we grow deliberately,” Macarelli said. “We’re hoping that folks take a look at us and become familiar with us and give us a shot.”