KROGER IN COURT: A Case of Déjà Vu
C&S Wholesale Grocers CEO Eric Winn took the stand on day three of a trial in Denver that aims to block the $24.6 billion Kroger-Albertsons merger. The case, brought by Colorado Attorney General Phil Weiser, is the third trial to stop the proposed mega-merger. Winn is therefore one of many witnesses who have testified for a second or third time on the topic.
C&S is the planned buyer of 91 Albertsons stores in Colorado if the merger goes through. And, as reported by The Denver Gazette, when state attorneys questioned Winn on Wednesday, they commented at one point how Winn knew the drill of questioning after going through similar questioning in the other trials.
The first trial, held in Oregon and brought by federal regulators, has already concluded, with U.S. District Judge Adrienne Nelson working expeditiously on a decision. The second case, in Washington state, is still ongoing. In fact, Kroger and Albertsons’ legal teams explained at the beginning of the third trial that many of their legal team will be flying between Washington and Colorado, apologizing for having absent members of their team occasionally as they work on both trials.
All three trials have created a sense of déjà vu at times, with the hearings focused on competition and the divestiture package, giving rise to Winn’s repeated testimony.
According to Kroger, its divestiture plan has already addressed the issue of competitive harm in Colorado. Under the plan, C&S will operate 91 of the 105 Colorado Albertsons stores under the leadership of seasoned Albertsons executives, including COO Susan Morris, who is poised to lead C&S’ retail division post-merger. Only 14 of the stores included in the merger deal will be operated by Kroger, and the grocer insisted that there’s no competitive harm in any of those 14 communities.
Despite the imminent rulings in Oregon and Washington, Colorado’s attorney general won’t back down. The Denver Gazette reported that before the state’s trial began, Weiser said in a press conference that he’d continue his pursuit to stop the merger until the grocers back out, despite the other court rulings. Those cases could go to appeals, he noted, so Colorado’s case will stay in trial unless the grocers accept any court rulings to place an injunction.
The Washington trial began Sept. 16 and is set to last three weeks. The Colorado trial is scheduled to end by Oct. 18.
Kroger continues to defend its deal, asserting that it entered into the agreement to merge with Albertsons to keep pace with an expanding set of competitors, extend its geographic reach, increase its operating efficiency and bring lower prices to customers. C&S is already budgeting $150 million per year to bring down prices and better compete with large players such as Walmart.
Cincinnati-based Kroger serves more than 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names. The grocer is No. 4 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America.
As of June 15, Albertsons Cos. operated 2,269 retail food and drug stores with 1,725 pharmacies, 403 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Boise, Idaho-based company operates stores under more than 20 banners. Albertsons is No. 9 on The PG 100.
Keene, N.H.-based C&S is No. 18 on PG’s list.
