Market merger hits home

Published 9:14 pm Tuesday, July 9, 2024

Kroger, the parent company of Fred Meyer and QFC, has identified 62 Oregon stores it would sell off to a competitor to secure regulatory approval for its $24.6 billion proposed merger with Albertsons.

Kroger announced plans to acquire Albertsons, which owns Safeway, in October 2022. In a bid to mollify antitrust regulators, the two companies said they would sell off 579 stores to New Hampshire-based C&S Wholesale Grocers for $2.9 billion.

The companies had not before Tuesday disclosed which stores would be sold.

The list identifies the 579 stores across 19 states that Kroger and Albertsons plan to sell to C&S. In addition to the Oregon stores, which include Safeway stores in Astoria and Seaside, the companies plan to sell 124 stores in Washington state and 10 in Idaho.

The companies also plan to sell distribution centers in Arizona, Colorado, Utah and Washington state and a dairy plant in Denver.

Both Kroger and Albertsons declined to comment on how they identified the stores and other assets to be divested to C&S. A Kroger spokesperson said that both Kroger and Albertsons are “committed to working closely with C&S to ensure a seamless transition of ownership for all divested stores and supporting operational infrastructure.”

The companies have already started notifying workers at the locations that would be sold. In a letter to Kroger employees Tuesday, CEO Rodney McMullen said that Kroger and Albertsons earmarked a selection of stores, brands and facilities for the sell-off that will “ensure C&S can competitively and cohesively operate in these geographies.”

“Under this agreement, we are confident that C&S will provide the transferred associates stability and opportunities to further enrich their careers with a growing company,” McMullen wrote in the letter. He added that “no frontline workers will lose their jobs and no stores will close as a result of the merger” and that C&S would honor existing labor agreements.

On Tuesday, a group of United Food and Commercial Workers local unions — including UFCW 3000, which represents Kroger and Albertsons employees in Washington state, northeast Oregon and northern Idaho — issued a joint statement, saying the release of the list “changes nothing.”

“The merger is not a done deal, far from it,” the unions said. “We remain focused on stopping the proposed megamerger … because we know it would harm workers, it would harm shoppers, it would harm suppliers and communities, and it is illegal.”

The two supermarket giants are awaiting a trial set to start Aug. 26 in federal court in Oregon after the Federal Trade Commission and nine states, including Oregon, filed suit in February to block what would be the largest supermarket merger in U.S. history.

U.S. District Court Judge Adrienne Nelson, a former Oregon Supreme Court justice appointed to the federal bench in 2023 by President Joe Biden, is overseeing the case and will decide whether to grant the FTC’s request for a preliminary injunction against the merger.

Federal regulators and the state attorneys general argued that, in Portland and other markets where Kroger and Albertsons have significant overlap, a fight for market share between the two has helped keep grocery prices down and the quality of products and services up. They contend that combining Kroger with Albertsons would lessen competition and give the merged chains too much control over grocery prices and employees’ wages.

Kroger and Albertsons are two of Oregon’s biggest grocery chains, with more than 170 stores altogether under the Fred Meyer, QFC, Albertsons and Safeway brands.

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