Kroger to purchase Giant Eagle for $1.65B

The supermarket, pharmacy and Market District brands will operate as a division of Kroger.

By JULIA BURDELSKI
TribLive

Cincinnati-based Kroger on Wednesday morning announced it will acquire local grocery store chain Giant Eagle for $1.65 billion.

Giant Eagle will retain its name and operate its Giant Eagle Supermarket, Giant Eagle Pharmacy and Market District brands as a division of Kroger, Giant Eagle spokesperson Jannah Drexler said.

A Kroger spokesperson confirmed the company did not intend to change Giant Eagle’s name but declined to answer additional questions Wednesday morning.

The deal consists of $1.25 billion in cash and about $400 million in assumed liabilities, according to a filing Wednesday by Kroger with the Securities and Exchange Commision.

The acquisition was unanimously approved by Kroger’s board of directors, the company said in a news release.

“Today’s announcement marks an exciting next chapter for our team members, customers, vendors and community partners,” Giant Eagle CEO Bill Artman said. “Together with Kroger, we will be well-positioned to advance our strategy and deliver better quality and service, better everyday value and a better shopping experience for our customers, while providing greater growth opportunities for our dedicated team members.”

In its SEC filing, Kroger addressed the future of Giant Eagle locations.

“In connection with obtaining the requisite regulatory clearance necessary to consummate the acquisition, Kroger and Giant Eagle expect to make limited Giant Eagle store divestitures,” according to the filing.

MyPerks to remain

Giant Eagle, a family-owned grocery store and pharmacy chain, has 197 supermarkets and standalone pharmacies throughout western Pennsylvania, northern Ohio, West Virginia, Maryland and Indiana. Giant Eagle has about $9 billion in annual sales, Kroger said in a news release.

“Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty,” said Greg Foran, CEO of Kroger.

Foran said the acquisition will allow Kroger to expand into “attractive adjacent markets.”

Kroger listed sales of more than $147 billion last year and nearly $1.9 billion in operating profit.

The transaction is expected to close in 2027, subject to regulatory clearance.

The deal will need approval from the Federal Trade Commission, Drexler said.

Drexler in a statement to TribLive said the Giant Eagle myPerks loyalty program is expected to remain in place after the acquisition. Giant Eagle anticipates maintaining its Cranberry headquarters and keeping the same leadership, she added.

Kroger sold groceries in the Pittsburgh market since the 1920s before pulling out of the area in the early 1980s. It once had shops throughout Allegheny, Beaver, Butler, Washington and Westmoreland counties, including in Greensburg, Natrona Heights and atop Pittsburgh’s Mt. Washington.

Kroger operates more than 2,700 stores under a variety of names, according to the company’s site. It has 32 food manufacturing facilities, 1,700 fuel centers and 2,270 pharmacies.

Giant Eagle last year sold GetGo for $1.6 billion to Quebec-based Alimentation Couche-Tard.

In September, Giant Eagle told TribLive it planned to invest more than $100 million in renovating stores and lowering prices.

“I want to be the best version of Giant Eagle that we can be,” Artman told Trib-Live at Giant Eagle’s headquarters last fall. “And I know we haven’t done that over the last couple of years.”

Experts last fall told Trib-Live there’s a major appetite for new supermarkets in the region. Wegmans is planning to open its first store in the area in Cranberry in late 2027. Meijer, too, is looking to expand into the Pittsburgh region.

Consolidation trend

Kroger’s acquisition of Giant Eagle continues a trend of consolidation in the grocery industry, said Jeff Inman, a marketing professor at the University of Pittsburgh. Aldi bought Winn-Dixie in 2024 and Amazon acquired Whole Foods in 2017.

“From Giant Eagle’s perspective, they have seen growing competition over the years from every direction: mass merchandisers like Walmart Superstores, club stores like Costco, BJ’s and Sam’s Club, and smallsize private label banners like Aldi,” Inman said. “And now, Wegman’s is entering the Pittsburgh market. So, it makes sense they would be willing to engage in talks with a major retailer like Kroger.”

Phil Lempert, an analyst and editor at Supermarket-Guru.com, views this deal as part of a broader trend of mid-sized, family-owned retailers merging with bigger brands.

“I believe a lot of these family-run private grocers are under severe pressure,” he said. “Now that they’re being run by the third, fourth or fifth generation of family members, they’re looking to cash out.”

He pointed out that costs are up for grocery stores, and so is competition, meaning retailers like Giant Eagle may be feeling a financial squeeze.

For shoppers, Kroger brings a lot of experience to the table, but Inman doesn’t expect many major changes. Kroger will want to maintain the Giant Eagle banner, Inman said, but he predicts the company will add its own Kroger stores and Kroger Marketplace — which is similar to Market District — when they expand.

Lempert isn’t so convinced that Giant Eagle will remain unchanged. He fears Kroger could slash staffing or close stores in some locations as part of the regulatory approval process.

“In the case of Giant Eagle, which I have the utmost admiration for, I’m concerned,” he said. “I’m concerned Kroger is going to change it.”

Kroger in late 2015 acquired the Mariano’s supermarket chain. Lempert said Kroger reduced its staffing, offered less training for employees and allowed in-store food service to fall “by the wayside.”

“That could happen with Giant Eagle as well,” he said.

Lempert also raised concerns that Kroger is seeing its market share and stock values dropping.

Perfect match?

Grocery acquisitions aren’t always smooth sailing. Kroger’s acquisition of Albertsons was blocked by then-President Joe Biden’s administration.

Inman, however, pointed out that President Donald Trump’s administration “seems more lenient on acquisitions,” so he expects this one to get the green light.

Jingze Jiang, an economics professor at PennWest Edinboro, also is interested to see the federal acquisition process play out given that Kroger’s proposal with Albertson’s failed.

“It’s a similar idea,” Jiang said. “From Kroger’s perspective, they tried to expand but Albertsons was too big. Now, they’ve found a perfect match.”

The acquisition is not surprising from Kroger’s standpoint, Jiang said, but it is from Giant Eagle’s.

“I’m curious about the motivation behind the deal because Giant Eagle is a popular brand — especially the more rural you go,” she said.