With Safeway selling Canada operations for $5.7 billion, it should be seen that Safeway will now be a much stronger competitor to Kroger.
They plan to repair balance sheet by paying down debt. An improved debt profile will reduce their costs and allow them to be more price and quality competitive against Kroger and others.
The Safeway transaction should be viewed as very NEGATIVE to Kroger.
Kroger needs competition. Their IT department couldn't pass a third grade test
Kroger's competition is Wal Mart and strong regionals (Hy Vee, Publix, WinCo, Trader Joes, Whole Foods, etc.). Safeway is on another level and it is a lower one than Kroger.