BusinessCompany News

Actions

Kroger and Albertsons announce plans to offload hundreds of locations amid merger

The merger has not yet been completed as the companies face federal government opposition.
Bagged groceries in a shopping cart outside a Kroger grocery store.
Posted at 12:16 PM, Jul 10, 2024

As Kroger and Albertsons attempt to merge two of the nation's largest chains of grocery stores, the companies announced plans to divest from 579 stores across 18 states and the District of Columbia.

As part of the plan, the stores would be sold to C&S Wholesale Grocers, LLC. Some Harris Teeter, Vons, Mariano's and Safeway locations would be included in the sale.

The companies put the full list of locations set to be sold on a website. The sale would also include six distribution centers and one processing plant.

RELATED STORY | Kroger 'embarrassed' to learn it advertised peach truck with doctored images from Nashville business

The companies had set early 2024 as a target to complete the merger, but the Federal Trade Commission has sued to block the move. The FTC alleged that the deal is "anticompetitive" and would lead to higher prices and fewer options for consumers.

Additionally, eight states have challenged the merger under similar grounds.

“This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today,” said Henry Liu, director of the FTC’s Bureau of Competition. “Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”

RELATED STORY | Kroger CEO took an 18% pay cut but still made $15.5 million in 2023

The United Food & Commercial Workers said it remains opposed to the merger following Tuesday's announcement.

"Today’s announcement changes nothing," the union said. "The merger is not a done deal, far from it. We remain focused on stopping the proposed mega-merger for the same reasons we have stated since it was first announced over 20 months ago — because we know it would harm workers, it would harm shoppers, it would harm suppliers and communities, and it is illegal."

Leaders of the grocery chains have disputed allegations that the merger would stifle competition. They have claimed that the merger would lower costs, which they would then pass on to consumers. 

In November, leaders from Kroger and Albertsons testified in support of the merger before a skeptical Congressional panel. Kroger CEO Rodney McMullen stated the merger would be beneficial to employees. 

"We also committed $1 billion to continue raising associate wages and comprehensive, industry-leading benefits, including quality and affordable health care, continuing education, wellbeing, and financial literacy programs," he said. "Kroger employs one of America's largest unionized workforces, and this merger secures the long-term future of union jobs by establishing a more competitive alternative to large, non-union retailers."

If the merger is allowed to proceed, Kroger and Albertsons would have 4,414 locations throughout the U.S. The sale of 579 stores to C&S Wholesale Grocers would give that company 741 total locations, which is more than many large grocery chains such as Whole Foods, Costco and Trader Joe's.