US Senator Warren warns Foot Locker-Dick's merger could raise prices, hurt small businesses

U.S. Senator Elizabeth Warren (D-Mass.) has sent a letter to the Federal Trade Commission (FTC) and the Department of Justice’s Antitrust Division, urging them to carefully scrutinise and potentially block the proposed acquisition of Foot Locker by Dick’s Sporting Goods. The Senator expressed concern that the merger of two of the largest retailers in the athletic footwear market could lead to higher prices for consumers, job losses, and harm to small businesses.

According to Senator Warren, the deal, which would combine the U.S.’s largest sporting goods retailer with one of the largest athletic shoe retailers, would give the new entity control of more than 15 percent of the U.S. sporting goods market. This could create a duopoly with JD Sports and result in a "significant scrutiny from antitrust agencies." She highlighted that the elimination of competition could "lead to higher prices for consumers and other negative effects," which would be particularly concerning given that many families are already struggling with rising prices for back-to-school shopping. A recent survey shows that 39 percent of parents "can’t afford back-to-school shopping this year," and 44 percent "plan to take on debt."

The proposed deal also raises concerns for workers and small businesses. Foot Locker has already indicated that some stores would likely close as a result of the acquisition, leading to job losses in communities that are already facing high rates of retail store closures. Furthermore, the new company would have increased power to negotiate favourable terms with manufacturers, putting independent retailers at a "disadvantage" and potentially leading to anticompetitive behaviour.

Senator Warren cited a recent federal judge's decision to block the merger of Kroger and Albertsons as a clear example of the benefits of competition. She noted that the new CEO of Albertsons has since stated the company will now focus on keeping prices low to attract shoppers. Warren concluded by stating that the FTC and DOJ "should carefully scrutinise this merger and block it if it illegally harms competition in violation of federal law," especially as consumers are already facing higher shoe costs from President Trump’s tariff policies, which economists project could lead to a 44% increase in shoe prices.