Kroger and Albertsons Unveil List of Assets Up for Sale

Brief description of the dive:

• Kroger and Albertsons have publicly disclosed a list of the exact locations of the stores, distribution centers and plant they intend to sell to C&S Wholesale Grocers.
• The listing shows the grocery store owners intend to sell nearly 600 stores in 18 states and the District of Columbia, as well as six distribution centers and one plant, to C&S.
• The list was released about six weeks before a key court hearing over the grocery chain’s planned merger is set to begin.

Diving Insight:

Kroger and Albertsons have presented their intention to part ways with their stores as a key reason why their proposed merger should not be considered a competitive threat since the mega-deal was announced in 2022, but opponents of the deal have been skeptical of the proposed sale from the outset.

The Federal Trade Commission, which is seeking an injunction to block the merger on antitrust grounds, in February rejected the companies’ initial agreement to sell 413 stores and other C&S assets as “far from mitigating lost competition.” Kroger and Albertsons responded in April with a revised plan to sell 579 stores along with a broader set of non-store assets, though they did not publicly disclose which locations they had earmarked for sale until Tuesday.

The supermarkets that Kroger and Albertsons plan to sell operate under 13 banners and are located in 18 states and the District of Columbia. The list includes 282 Safeway stores and 99 Albertsons locations, as well as numerous stores under the QFC, Vons, Carrs, Pavilions and Tom Thumb banners.

The FTC and other critics have argued that C&S isn’t strong enough to run a competing grocery chain, prompting strong responses from Kroger and Albertsons. A federal judge in Oregon is scheduled to begin a hearing Aug. 26 to consider the FTC’s request for a temporary injunction to stop the merger.

The FTC “ignores the fact that C&S is a large, sophisticated, and well-financed company with extensive experience in the food industry and is well-positioned to successfully manage the significant assets it will receive as part of the sale package and execute its business plans,” Albertsons said in a legal filing with the agency in March.

The companies also face lawsuits seeking to stop the merger from attorneys general in states including Colorado and Washington.

On Tuesday, Kroger confirmed that the sale proposal was justified.

“C&S’s strong operational focus, combined with its experienced management team and financial resources, will enable the company to successfully operate the divested stores for many years to come,” a Kroger spokesperson said in an emailed statement.

The spokesperson also emphasized that Kroger and Albertsons had previously committed not to close stores or lay off employees as a result of the merger.

In a joint statement after the list was released, several United Food and Commercial Workers Union locals said they continue to oppose the merger plan.

“Today’s announcement changes nothing. The merger is not a done deal, quite the opposite. We remain focused on stopping this proposed mega-merger for the same reasons we have given since it was announced more than 20 months ago — because we know it would hurt workers, it would hurt shoppers, it would hurt suppliers and communities, and it is illegal,” the labor groups said.