Kroger, Albertsons Unveil Stores to Be Divested Before Trial
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Kroger Co. released the full list of stores, distribution centers and plants it plans to divest to secure regulatory approval for the proposed merger with Albertsons Cos.
The companies have started notifying staff at affected locations, CEO Rodney McMullen wrote in a July 9 memo to employees. Impacted workers will become employees of C&S Wholesale Grocers after the transaction closes, McMullen wrote, and will remain as Kroger and Albertsons staff until then. C&S has committed to transferring pay and health plans and assuming all collective bargaining agreements, he added.
Kroger, Albertsons and C&S rank Nos. 38, 40 and 98, respectively, on the Transport Topics Top 100 list of the largest private carriers in North America.
The grocers, which announced their $24.6 billion merger in October 2022, are sharing the list ahead of a trial expected in August that will decide the outcome of their deal. Kroger and Albertsons agreed to sell a package of stores and other facilities to C&S, boosting the number to 579 from 413 in April after the Federal Trade Commission blocked the tie-up.
The list includes 124 stores in Washington state, 101 in Arizona, 91 in Colorado and 63 in California, among others. The package also includes a dairy plant in Colorado as well as six distribution centers across four states.
A Ralphs trailer at an industry show. Kroger and Albertsons own about 5,000 stores in the U.S., including brands such as Ralphs, Harris Teeter, Safeway and Acme. (Aaron Perryman/Transport Topics)
Together, Kroger and Albertsons have nearly 5,000 stores across the country, including banners like Kroger, Ralphs and Harris Teeter as well as Albertsons, Safeway, Acme and Jewel-Osco.
Kroger and Albertsons say they need the merger to compete with larger, nonunionized rivals Walmart Inc., Amazon.com Inc. and Costco Wholesale Corp., which rank Nos. 2, 9 and 46 on the TT private 100. The companies have pledged to invest $500 million to cut prices and $1 billion to raise worker wages and benefits in addition to $1.3 billion to improve Albertsons stores.
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The FTC’s complaint alleges that the deal would harm consumers by eliminating competition on prices and quality, making the combined firm less likely to improve its services by offering flexible hours and pickup services. It also would give the grocers increased leverage over workers, slowing wage growth and worsening benefits, according to the complaint.
The FTC also has alleged that C&S would face significant challenges stitching together the various stores acquired from the grocers and deems the grocers’ proposed divestiture package inadequate. In 2015, the agency allowed Albertsons to buy Safeway after it sold 168 stores, the bulk of them to Washington state grocer Haggen Holdings. Less than a year later, Haggen filed for bankruptcy, and Albertsons bought back a number of the stores.
The list of stores to be sold to C&S includes dozens of locations that Albertsons reacquired, including 12 Haggen stores in Washington.
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