CASPER, Wyo. — Kroger announced a plan to divest an additional 166 properties in an effort to win federal approval for its merger deal with Albertsons.
According to the trade publication Supermarket News, or SN, the added stores bring the total to 579 stores that will be sold to C&S Wholesale Grocers if the deal goes through. Wyoming’s Albertsons stores are included in the proposal to sell to C&S Wholesale Grocers. Most of the brands to be sold include QFC, Marino’s, Carrs and Haggen.
Kroger said in its release that C&S will license the Safeway brand in Arizona and Colorado and license the Albertsons brand in California and Wyoming. Kroger will also rebrand the Albertsons and Safeway stores it retains in those states, keeping the brands for those in the remaining states. The number of Albertsons stores affected in Wyoming, Utah and Montana will total 11, according to SN.
The Federal Trade Commission filed to sue the company in February in an effort to block the $24.6 billion merger under antitrust concerns. Attorneys general in Colorado and Washington state have also filed their own lawsuits in opposition to the plan.
The FTC’s filing argues that C&S currently operates only 23 supermarkets and would face significant obstacles taking on hundreds of new stores.
“Kroger operates thousands of stores across 36 states, which includes regional banners such as Fred Meyer, Fry’s, Harris Teeter, King Soopers, Kroger, and Quality Food Centers,” the FTC said in its filing. “Albertsons also operates thousands of stores across 35 states under regional names including Albertsons, Haggen, Jewel-Osco, Pavilions, Safeway, and Vons. If the merger were completed, Kroger and Albertsons would operate more than 5,000 stores and approximately 4,000 retail pharmacies and would employ nearly 700,000 employees across 48 states.”
The FTC added that the “Kroger and Albertsons’s inadequate divestiture proposal is a hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together and falls far short of mitigating the lost competition between Kroger and Albertsons.”
“Even if C&S were to survive as an operator, Kroger and Albertsons’s proposed divestitures still do not solve the multitude of competitive issues created by the proposed acquisition, according to the complaint,” they said.
Kroger claims that the new plan will help ensure that no stores will close and all frontline employees will remain with the company. They claim that the added stores will increase distribution capacity, expand C&S’s corporate office and infrastructure and include a dairy facility, fuel centers and pharmacies. C&S will also have access to Albertsons’s Signature and O Organics private labels, according to Reuters.
According to its website, C&S is a wholesale grocery supply business located in New Hampshire. According to Kroger’s website, Kroger currently operates nearly 2,800 stores in 35 states and is one of the world’s largest retailers. Albertsons, based in Boise, Idaho, operates more than 2,200 stores in 34 states and the District of Columbia.
