Kroger agrees to buy Albertsons for $25B, but the super-merger is about more than groceries

Scanning a bean can… This barcode has a bigger price tag: on Friday, Kroger said it was buying smaller rival grocer Albertsons for $24.6B. The super-merger is one of the largest in America’s grocery history. Combined, Ralphs owner Kroger and Safeway parent Albertsons would have 7K+ workers in 5K stores, gaining (super) market share:

• The top dog is Walmart, which controls a fifth of the US grocery market. Kroger’s #2 with 10% of total dollars spent, followed by Costco.
• Post-merger, Kroger and Albertsons would have ~15% market share. But the deal could be challenged by regulators.
• Not in the bag: Kroger and Albertsons are expected to sell stores in regions where they have overlapping influence, to help gain regulatory approval.

Add ads to the bagging area… The merger could boost profits by integrating Kroger’s and Albertsons’ operations and giving them more leverage in vendor negotiations. But it could also boost their share of the “retail media” market — one of the fastest-growing advertising sectors. You can tell a lot about someone from their grocery cart (Red Bulls + ramen = college). By combining their customer data, Kroger and Albertsons could boost their ad-targeting value.

• Kroger and Albertsons both have a retail ad biz (think: promos on sites), though they don’t break out how much they earn from them.
• Kroger was one of the first retailers to expand its ad biz beyond its own properties, letting brands use its shoppers’ data to target them on third-party apps and sites.