Walgreens Drug company, officially named Walgreens Boots Alliance Inc., on Tuesday agreed to buy Rite Aid Corp. for about $9.4 billion, combining two of the nation’s largest drugstore chains as they bulk up to increase their profits. The claim is that they are doing this to better compete in the rapidly changing health care industry.
The two companies didn’t say whether they would shutter stores or lay off workers after the deal closes. But they did say that “decisions will be made over time regarding the integration of the two companies” and that Walgreens “plans to further transform Rite Aid’s stores to better meet consumer needs.” A Rite Aid is about 3/4 mile from my house and a Walgreens is about one mile from my house. Do you think both will remain open after this consolidation?
Soon when you say “I am going to the drug store” no one will ask which one because there will be only one. That is also likely to happen in the retail food market business as Kroger continues its march to own all the general purpose food stores no matter what the brand name is on the front of the building. In Los Angeles both Ralphs and Food 4 Less are owned by Kroger.
The dismaying part of this march to consolidation is the reduced competition and the ensuing price hikes. No matter what those companies say, when there is reduced competition there are price increases.
The saddest part of this situation is that our congress sits on its hands and does nothing to stop the consolidations. This is the reason that Donald Trump, Ben Carson, and Bernie Sanders are all doing well in the presidential polling. They say that they will stop the control of our society by the wealthy.
Can we believe those outsiders? The insiders certainly have not done the job.