Mariano's is one of the Kroger banners that will be licensed by C&W Wholesale Grocers.
It’s official: C&S Wholesale Grocers is scooping up 413 stores from The Kroger Co. and Albertsons Cos. ahead of their planned merger. Following a report in Bloomberg News based on a tip from an anonymous source, C&S confirmed the $1.9 billion deal on Sept. 8.
[Read more: “Kroger's Flat Q2 Punctuated By Growth In Digital Sales”]
The New Hampshire-based wholesaler agreed to buy the 400-plus stores across 17 states, along with eight distribution centers and two offices. The stores are mostly in markets where Kroger and Albertsons overlap and where antitrust issues might emerge during the review by the Federal Trade Commission (FTC).
The number of stores contained in the divestiture plan by geography is as follows:
- Washington: 104 Albertsons Cos. and Kroger stores
- California: 66 Albertsons Cos. and Kroger stores
- Colorado: 52 Albertsons Cos. stores
- Oregon: 49 Albertsons Cos. and Kroger stores
- Texas/Louisiana: 28 Albertsons Cos. stores
- Arizona: 24 Albertsons Cos. stores
- Nevada: 15 Albertsons Cos. stores
- Illinois: 14 Kroger stores
- Alaska: 14 Albertsons Cos. stores
- Idaho: 13 Albertsons Cos. stores
- New Mexico: 12 Albertsons Cos. stores
- Montana/Utah/Wyoming: 12 Albertsons Cos. stores
- DC/Maryland/Virginia: 10 Harris Teeter stores
As for the banners, C&S will take on the QFC, Mariano’s and Carrs brand names and get exclusive licensing rights to the Albertsons brand name in Arizona, California, Colorado and Wyoming. Stores currently under these banners that are retained by Kroger will be re-bannered into one of the retained Kroger or Albertsons Cos. banners following the close of the transaction. In the four states where C&S will have the license to the Albertsons banner, Kroger will re-banner the retained stores following the close of the merger with Albertsons Cos. Kroger will maintain the Albertsons banner in the remaining states.
The brand acquisition extends to store brands, too. C&S will add five private labels to its portfolio: Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro.
With this deal, C&S continues its ongoing expansion through divestiture. In 2021, the company purchased the Wisconsin-based Piggly Wiggly Midwest and also agreed to buy 12 Tops Markets stores that were offloaded during the Tops merger with Price Chopper/Market 32.
Meanwhile, Kroger and Albertsons are getting closer to their merger with the official spinoff of select stores, DCs and brands. “Following the announcement of our proposed merger with Albertsons Cos., we embarked on a robust and thoughtful process to identify a well-capitalized buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today. C&S achieves all these objectives,” said Rodney McMullen, chairman and CEO of Kroger, adding, “C&S is led by an experienced management team with an extensive background in food retail and distribution and has the financial strength to continue investing in associates and the business for the long run.”
McMullen also sought to assuage employee concerns. “Importantly in our agreement, C&S commits to honoring all collective bargaining agreements which include industry-leading benefits, retaining frontline associates and further investing for growth,” he noted.
In its company statement, Kroger emphasized that the deal follows through on Kroger and Albertsons' initial promise that no stores will close as a result of the merger.
Serving 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names, Cincinnati-based Kroger is No. 4 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Boise, Idaho-based Albertsons operates more than 2,200 retail stores in 34 states. The company is No. 9 on The PG 100. PG also named both companies to its Retailers of the Century list.
Founded in 1918 as a supplier to independent grocery stores, Keene, N.H.-based C&S services customers of all sizes, supplying more than 7,500 independent supermarkets, chain stores, military bases and institutions with 100,000-plus products, in addition to operating corporate stores. The company is No. 17 on The PG 100.