A closer look at Kroger’s deal to buy Giant Eagle

ICYMI, Kroger is back in the M&A game, last week announcing its plans to acquire Pittsburgh-based, family-owned grocery chain Giant Eagle for $1.65 billion.

Giant Eagle operates 197 stores and 11 pharmacies, with locations in Ohio, Pennsylvania, West Virginia, Maryland, and Indiana, potentially giving Kroger a foothold in the Midwest and Mid-Atlantic markets and helping it compete with mega-retailers like Walmart.

The deal, which is set to close in 2027 pending regulatory approval, is the first M&A move under new CEO Greg Foran’s leadership and its first proposed deal since its tie-up with Albertsons was terminated in late 2024.

Here’s a closer look at some notable factors of the deal:

Common strategies: Both grocers are in need of a strategy shift to get shoppers in the door: They’ve both been seeing lackluster foot traffic below that of the total grocery sector through May, Elizabeth Lafontaine, director of research at Placer.ai, said via email.

Both grocers have recently focused on price cuts, one of Kroger’s core ambitions in its Albertsons deal (which drew significant skepticism). Foran told Bloomberg in May the grocer was cutting prices on thousands of items, and Justin Weinstein, EVP and chief merchandising and marketing officer at Giant Eagle, told Retail Brew in October the company was investing $100 million to lower prices and improve its stores.

Playing catch-up: The addition of nearly 200 stores to its footprint will help Kroger not only compete with big box retailers, but also keep its store count neck-and-neck with Aldi. With plans to open 180 stores this year, Aldi is set to surpass Kroger to become the country’s second-largest grocery chain, but the Kroger-Giant Eagle deal could challenge that.

Regulatory hurdles: Unlike the proposed Kroger-Albertsons merger, corporate deal lawyer Jonathan Lazarow told Retail Brew via email the deal likely won’t be met with “much regulatory pushback.” Still, to ensure regulatory compliance, Kroger and Giant Eagle said they’d divest a “limited” number of Giant Eagle stores. Some reports have identified Columbus, Ohio, as a likely location for divestiture due to significant overlap in the area.

The National Grocers Association released a statement last week calling for regulators to “conduct a robust review” of the deal’s potential impact on local competition.

“Where store divestitures will be required, independent grocers should be prioritized as buyers to ensure local communities benefit from a diverse marketplace,” the group said.