XPost: alt.retail.grocery, alt.fraud, alt.fan.rush-limbaugh
XPost: or.politics
The Safeway brand in Colorado, currently run by Albertsons, won't belong
to Kroger if the two grocers are ever allowed to merge, according to a new agreement.
The move came after state and federal officials put pressure on the
largest potential supermarket merger in the U.S. Kroger and Albertsons announced Monday they plan to divest more stores to help the deal go
through.
Kroger said it will sell 579 stores across the country to C&S Wholesale —
116 more than originally planned — including 91 Albertsons-owned locations across Colorado.
That’s nearly all the Albertsons stores in the state. The chain operates
105 stores under the Albertsons and Safeway banners.
Under the new agreement, Kroger said it will license the Safeway name to
C&S in Colorado and Arizona only.
The Kroger and Albertsons deal worth $24.6 billion has been facing
mounting pressure from government officials worried the merger would hurt consumers already facing rising food costs.
Kroger hopes dropping more stores will help bolster against the lawsuits attempting to block the merger. The sale to New Hampshire-based C&S Wholesalers, parent company of Piggly Wiggly and Grand Union Supermarkets, would also introduce a new grocery competitor to Colorado.
"We have reached an agreement with C&S for an updated divestiture package
that maintains Kroger's commitments to customers, associates and
communities, addresses concerns raised by regulators, and will further
ensure that C&S can successfully operate the divested stores as they are operated today," stated Kroger’s CEO Rodney McMullen in a news release.
Colorado AG sues to block Kroger-Albertsons merger
Colorado was one of several states to sue to block the merger. In
February, Colorado Attorney General Phil Weiser was the first to follow Washington's attorney general saying the deal violated the state’s
antitrust laws and alleged the grocers had an illegal “non-poach” and “non-solicitation” agreement when Colorado union workers went on strike in
2022 — which the grocers denied.
Kroger operates nearly 150 stores in the state under the King Soopers and
City Market names.
“These fears are warranted because the market for grocery stores in
Colorado is already very concentrated with too little competition,” Weiser
said in February. “And the merger would make the problem worse.”
The attorney general was also skeptical by the original divesture plan to
C&S, saying it was a "recipe for mischief." He said the state is worried
the brand doesn't have the experience to operate in the state and the deal could repeat the failures of the Albertsons and Safeway merger in 2015,
when the grocer divested its stores to Haggen only to buy them back later
at a lower price following Haggen's bankruptcy.
The Federal Trade Commission quickly followed less than two weeks later
and also sued to stop the deal. Eight states signed onto the federal
lawsuit: Arizona, California, Illinois, Maryland, Nevada, New Mexico,
Oregon and Wyoming.
The Safeway banner will be licensed to C&S only in Colorado and Arizona,
Kroger said. C&S will also get the license to the Albertsons name in
California and Wyoming. Kroger will retain the rights to the Albertsons
and Safeway names in all other states.
The remaining Albertsons-owned stores in Colorado that C&S won't take over
will be rebranded, Kroger said.
The deal with C&S and Kroger is worth nearly $3 billion.
Colorado has the third-largest impact of the divesture following
Washington, where the grocer plans to sell 124 Albertsons and Kroger
stores, and 101 Albertsons stores in Arizona.
The union of grocery workers UFCW Local 7 — including the Colorado chapter
— spoke out against the divesture in a statement claiming it's an uphill
battle for C&S to take over hundreds of stores and operate them
efficiently.
"They have no experience operating retail stores in these states, would
still lack the IT, customer loyalty and manufacturing capabilities
needed," the statement said, "and would most likely end up monetizing the
real estate under many of these stores.”
"We are confident this expanded divestiture package will provide the
stores, supporting assets and expert operators needed to ensure these
stores continue to successfully serve their communities for many
generations to come," stated C&S CEO Eric Winn in the release.
https://denvergazette.com/news/business/kroger-safeway-merger-divestment- colorado/article_491e1042-00be-11ef-b35d-7b049c565d14.html
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