KROGER IN COURT: What Role Does C&S Play Post-Merger?
Day six of the Washington state trial aimed at blocking the Kroger-Albertsons merger had the court hearing from Eric Winn, CEO of C&S Wholesale Grocers – the company that has become the third piece of the puzzle in this $24.6 billion mega-merger deal.
C&S is the largest grocery wholesale distributor in the United States, and the eighth-largest privately owned company. It confirmed in September 2023 that it would buy the stores, distribution centers and plant locations that Kroger and Albertsons wanted to shed as part of their planned merger to appease federal regulators by reducing the retailers' overall market share. In July 2024, Kroger released the list of locations that are part of the C&S divesture deal.
Kroger believes that C&S’s existing distribution network positions it well for retail expansion, and that its procurement network and deep industry experience will enable C&S to aggressively compete in the grocery retail market. C&S currently operates 25 retail supermarkets and is a franchisor of 165 additional locations.
For decades, C&S has also provided retail customers the services that self-distributing retailers must typically handle for their own stores, such as wholesale procurement, private label merchandising, supply chain services, category management, vendor negotiations, retail technology and digital marketing.
C&S' divesture deal also extends to store brands. The company will add five private labels to its portfolio: Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro.
The company is already working ahead of the pending Kroger-Albertsons merger by budgeting $150 million per year to bring down prices and better compete with large competitors. According to Kroger, prices at C&S post-merger will be lower than many current prices at Albertsons stores.
Additionally, C&S would get a clone of the technology stack that Albertsons currently uses to run its business. Plus, it will receive three years of historic customer transaction data from Kroger and Albertsons to help develop a loyalty program.
That's not all C&S will be getting from Albertsons: Susan Morris, COO for Albertsons, will lead C&S’ retail division post-merger. Of the 579 stores in the divestiture package, Morris is already running 486 of those stores today. These are teams in geographies that already report to her.
Morris told the federal judge during the recent FTC trial that took place in Portland, Ore.: “I’m confident in our ability to run these stores. I don’t want to run another mini-Kroger or a mini-Albertsons. This is a chance to run something distinct.” Morris is an industry veteran with nearly four decades of grocery experience.
C&S brings its own extensive experience with the merger process, having been an FTC- approved divestiture buyer in prior grocery transactions. In 2021, C&S purchased 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. During this time, C&S was approved by FTC as the divestiture buyer. C&S continues to operate all but one of the stores it acquired through the 2021 and 2022 Piggly Wiggly and Tops divestitures.
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.
