Kroger Finally Reveals Locations of Stores to Be Divested to C&S (2024)

Company has begun notifying affected associates

Emily Crowe

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As it moves forward with its $24.6 billion merger withAlbertsons Cos. despite continued legal challenges,The Kroger Co. has released alist of the stores, distribution centers and plant locations that it plans to divest to C&S Wholesale Grocers. Some579 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.

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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 bytheAttorneysGeneralfrom the states ofColorado and Washingtonandthe 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 todismiss 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.”

Ahearing 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’sQ1 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 thetop food and consumables retailers in North America. Viewcompany website. Boise, Idaho-based Albertsons is No. 9 on The PG 100.View company website. PG also named Kroger and Albertsons among theRetailers of the Century. Keene, N.H.-basedC&S is No. 18 on PG’s list.

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Kroger Finally Reveals Locations of Stores to Be Divested to C&S (2024)

FAQs

Why is Kroger divesting stores? ›

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.

What stores are in the Kroger divestiture list? ›

These planned divestitures include stores from multiple brands, including Albertsons, Carrs, Eagle, Haggen, Harris Teeter, Jewel-Osco, Lucky Store, Marianos, Market Street, Pavilions, QFC, Randalls, Safeway, Tom Thumb, and Vons. Here are the number of store divestitures planned for each state: Alaska: 18.

Is Kroger selling to C&S? ›

Kroger and Albertsons plan to sell nearly 600 stores as part of their merger efforts. The companies now plan to sell 579 Kroger and Albertsons stores in markets where they overlap to C&S Wholesale Grocers, a New Hampshire grocery supplier and operator, for $2.9 billion.

Did Kroger reveal Colorado groceries being sold? ›

Kroger reveals 91 Colorado stores being sold to bag giant Albertsons merger. A Safeway store in Boulder, pictured here, is among dozens of Colorado grocery stores Kroger Co. identified as sites it will sell to C&S Wholesale as part of a $24 billion merger.

What does divested stores mean? ›

A divestiture is the partial or full disposal of a business unit through sale, exchange, closure, or bankruptcy. A divestiture most commonly results from a management decision to cease operating a business unit because it is not part of a company's core competency.

Did Kroger Albertsons amend divestiture deal with C&S? ›

This amended agreement enables C&S's heritage of selection, value and customer service to continue our legacy of braggingly happy customers." The updated divestiture package increases the total store count by 166 to include 579 stores that will be sold to, and continue operating as they do today by the new owner, C&S.

What grocery chain is Kroger buying out? ›

Similarly, executives for both supermarket chains have conceded that Kroger's acquisition of Albertsons is anticompetitive, with one executive reacting candidly to the proposed deal: “you are basically creating a monopoly in grocery with the merger.”

Who does C&S supply? ›

Founded in 1918 as a supplier to independent grocery stores, C&S now services customers of all sizes, supplying more than 7,500 independent supermarkets, chain stores, military bases and institutions with over 100,000 different products.

Who owns the majority of Kroger stock? ›

Largest shareholders include Vanguard Group Inc, BlackRock Inc., Berkshire Hathaway Inc, State Street Corp, Harris Associates L P, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, Geode Capital Management, Llc, VFINX - Vanguard 500 Index Fund Investor Shares, VIMSX - Vanguard Mid-Cap Index Fund Investor ...

Who owns C&S groceries? ›

Rick Cohen is owner and executive chairman of C&S Wholesale Grocers, the nation's largest grocery wholesaler, with some $35 billion in annual revenue.

Why is Kroger buying Albertsons? ›

Kroger and Albertsons agreed to merge in October 2022. The companies said a merger would help them better compete with big retailers like Walmart, Costco and Amazon, which owns Whole Foods, because they would have more power to negotiate prices and could save on distribution and administrative costs.

Did Kroger buy out Safeway? ›

The current plan is for Kroger to buy all 135 Albertsons/Safeway properties, then sell 101 of them to C&S Wholesale Grocers, a company that operates Piggly Wiggly supermarkets and other stores, primarily in Wisconsin, Georgia, the Carolinas and other states back east.

Did Kroger buy Winn Dixie? ›

Is Kroger buying Winn-Dixie? No, Aldi is buying Winn-Dixie. Kroger, the country's largest supermarket chain by revenue, is not involved in the deal.

Who owns Kroger supermarkets? ›

Who owns Kroger? Though it was founded by Bernard Kroger in 1883, Kroger is currently owned by CEO and Chairman Rodney McMullen. McMullen literally started as a stock clerk at a Kentucky Kroger location and worked his way up.

What percentage of grocery stores are owned by Kroger? ›

With the acquisition of Albertsons, Kroger will consolidate its position as the second largest food retailer in the US with an 11.8% share (up from 7.1% in 2021) behind Walmart which has a 17.1% share of the grocery market, according to GlobalData.

Is Kroger going under? ›

Kroger's likelihood of distress is under 11% at this time. It has tiny risk of undergoing some form of financial distress in the near future.

What supermarket is merging with Kroger? ›

Kroger will also invest $1.3 billion to improve Albertsons' stores following the merger, all to better serve customers.

What is the status of the Kroger Albertsons merger? ›

CHICAGO (WLS) -- The Kroger-Albertson's merger has been halted.

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