THE FRIDAY 5: Kroger Makes Divestiture Moves; Costco Increases Membership Fees

1. Kroger Moves Forward With Albertsons Merger Plans 

News came in this week that The Kroger Co. is taking the next steps to complete its $24.6 billion merger with Albertsons Cos. despite continued legal challenges. Kroger released a list of the stores, distribution centers and plant locations that it plans to divest to C&S Wholesale Grocers. 

Some 579 Kroger and Albertsons stores, as well as other assets, will be divested as part of the plan, and Kroger has begun the process of informing associates at those locations of the move. In a letter to affected associates, Kroger CEO Rodney McMullen said the company is “confident that C&S will provide the transferred associates stability and opportunities to further enrich their careers with a growing company.”

A coalition of United Food & Commercial Workers local unions, including UFCW 7, UFCW 324, UFCW 400, UFCW 770 and UFCW 3000, joined together to release a statement about Kroger's move.

“Today’s announcement changes nothing. 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," the statement said.

Additionally, it was revealed this week that Albertsons EVP and COO Susan Morris would lead the retail division of C&S if the proposed merger goes through. According to an internal memo by Albertsons CEO Vivek Sankaran, Morris’ title would be president and CEO of retail for C&S. 

In his internal memo, Sankaran said that Morris “rose through the ranks to become one of the most influential and high-impact leaders in our company and across our industry. Susan has been instrumental in building the Albertsons we know today, starting with a few hundred stores in 2006. She will bring to C&S a multi-decade track record of operational excellence, innovation and growth. …”

2. A New Labor Agreement at Wegmans

Nearly 1,000 union members who work for Wegmans Food Markets Inc. ratified their latest contract this week. The Teamsters Local 118 organization announced that a group of Wegmans employees voted by a three-to-one margin to approve the collective bargaining agreement.

The seven-year agreement affects union members who work in Wegmans warehouse, transportation and skilled trades departments. The contract includes wage increases of 27% over the lifetime of the agreement; some warehouse employees will be paid $40 an hour, while some drivers can make $200,000 a year. Union members and the company also came to terms on a comprehensive health care package, scheduling and paid time off. 

3. Sam’s Club, Costco Major Membership Changes

Membership moves by two warehouse retailers made waves this week. After months of discussion on the subject, Costco Wholesale Corp. finally moved to raise its membership fees, with annual membership fees increasing by $5 for U.S. and Canada Gold Star (individual), Business and Business add-on members, and annual fees for Executive Memberships going up from $120 to $130, effective Sept. 1.

Sam’s Club, meanwhile, has informed its Plus members that it will soon increase free shipping minimums. Starting Aug. 19, Plus members will get free shipping only on eligible items online or in the app when they spend $50 or more per order. Otherwise, an $8 fee will be applied. Currently, Plus members get free shipping on most online items. 

While many members have taken to social media to voice their frustration over the move, Sam’s Club justified the increase on its website, writing “By adding a cart minimum, we are increasing access to different ways of shopping for our members. This will make it easier for you to get the products you want, the way and at the time you want.”

4. Summer Specials at Dollar General, Kroger, 7-Eleven

Seasonal specials and new product lines gained reader attention this week, starting with Dollar General’s soon-to-launch kitchen and housewares line with global icon Dolly Parton. The line will include approximately 50 items priced from $1 to $10, with most items costing $5 or less. Items include rolling pins and measuring cups, kitchen towels, butterfly mason jars and coffee mugs, and scented candles. 

7-Eleven’s Slurpee Day on, of course, July 11 (7/11) was also celebrated this week. Timed with the c-store’s anniversary, the event traditionally attracts a large audience who come to the store for a free small Slurpee drink, available in favorite and new flavors such as Mtn Dew Freedom Fusion. 7-Eleven also introduced new menu items this month, including chicken nuggets, breakfast skillet taquitos, Philly cheesesteak taquitos and personal breakfast pizzas. 

On the food retail side and in the midst of massive summer sales from the likes of Target, Walmart and Amazon, Kroger announced this week that it is rolling out a weeks-long event featuring special deals for its Boost by Kroger Plus members. Boost Bonus Days will run from July 10 to July 23, and offer special discounts and free private label products.

5. Lidl Makes Conservation Commitment With WWF

Discount grocer Lidl and WWF, one of the world’s largest independent conservation organizations, have launched an international and strategic partnership active in 31 countries to ensure a more sustainable future. The partnership will focus on the following key areas:

• Conservation and promotion of biodiversity
• Responsible management of water resources
• Climate protection through science-based climate targets
• Building and expanding traceable, deforestation-free and conversion-free supply chains
• Responsible sourcing of critical raw materials such as palm oil, soy, cocoa, tea, coffee, wood and paper products
• Responsible sourcing of farmed and wild-caught seafood, including the safeguarding of critical fishing grounds and stocks
• Engaging in advocacy for more conscientious, sustainable diets and consumption
• Reduction of food waste