Kroger Finally Reveals Locations of Stores to Be Divested to C&S
As it moves forward with its $24.6 billion merger with Albertsons Cos. despite continued legal challenges, The Kroger Co. has 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.
According to a Kroger spokesperson, the stores and other assets to be divested were thoughtfully chosen to allow C&S to succeed in the geographies and maintain, if not increase, competition in those areas.
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.”
Continued McMullen: “Together, we have committed that no frontline workers will lose their jobs and no stores will close as a result of the merger, which is true for stores that remain with Kroger and those that are transferred to C&S. C&S has also committed to maintaining transferred associates’ pay and health and wellness plans and to assume all collective bargaining agreements.”
Further, McMullen said that associates in the divested locations will become associates of C&S following resolution of several court cases and the closure of the merger transaction. Until that happens, they will remain employed by Kroger or Albertsons, respectively, and those stores will operate as they do today.
The QFC, Mariano’s, Carrs and Haggen banner names remain part of the divestiture agreement, and C&S will license the Albertsons banner in California and Wyoming only, as well as the Safeway banner in Arizona and Colorado only. Stores under those banners that remain with Kroger will be re-bannered into one of the retained Kroger or Albertsons banners.
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.
"The merger proposal was rejected in January and February by the Attorneys General from the states of Colorado and Washington and the Federal Trade Commission," the local unions continued. "We applaud their actions. They have been in possession of this proposed divestiture list, made public today by the companies, for months and that did not change their opposition to the proposed merger. These legal challenges to the proposed merger are moving forward with hearings beginning at the end of July and scheduled to go through September.”
On the current legal front, a bid by Kroger to dismiss a lawsuit in the state of Colorado seeking to halt the merger was denied late last month. The court there believes that since Kroger does business in the state, it is responsible for upholding its monopoly laws.
For its part, Kroger argued that Colorado’s case against it is redundant because it is already facing a similar lawsuit at the federal level. The court, however, disagreed, saying that dismissing the case "would be at odds with numerous rulings recognizing states as co-equal antitrust enforcers.”
A hearing date of Aug. 26 was set by Judge Adrienne Nelson of the U.S. District Court for the District of Oregon regarding the FTC’s request for a preliminary injunction against the merger. The August hearing date will come exactly six months after the FTC filed suit to halt the merger and divestiture plan, claiming that the move "falls far short of mitigating the lost competition between Kroger and Albertsons" and would increase grocery prices for millions of Americans.
Kroger remains committed to the merger and is ready to defend itself in court. “We are prepared to defend our merger because it will produce meaningful and measurable benefits for customers, for associates, and for communities across the country,” said Kroger CEO Rodney McMullen during the company’s Q1 earnings call. “Customers will benefit from lower prices and more choices following the merger close.”
Cincinnati-based Kroger is No. 4 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. View company website. Boise, Idaho-based Albertsons is No. 9 on The PG 100. View company website. PG also named Kroger and Albertsons among the Retailers of the Century. Keene, N.H.-based C&S is No. 18 on PG’s list.
