Tuesday, February 27, 2024

Washington Retail Report November / Kroger and Albertsons announce divestiture plans in proposed merger

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The Kroger Co. and Albertsons Companies Inc. have publicized a definitive agreement with C&S Wholesale Grocers to sell select stores, brands, and facilities—a significant advancement in their proposed merger. This collaboration promises extensive benefits for American consumers by offering expanded access to affordable food, positioning itself as a robust alternative to giant, non-union retailers.

One of the main highlights of this merger is its pledge to retain all current stores, ensuring no job losses. Frontline workers will keep their positions, and all existing union agreements will persist, promising industry-leading health benefits, pensions, and competitive wages.

The merger of these grocery titans is seen as a strategic move to counteract the increasing dominance of non-union competitors, notably Walmart and Amazon. Their joint venture will usher in greater customer affordability while raising the bar for employee wages and benefits.

C&S Wholesale Grocers, the partner for this transaction, is renowned in the grocery supply sector. Established in 1918, C&S has a rich history of serving diverse clients, from independent supermarkets to retail chains and military bases. With a portfolio spanning over 100,000 products, they are well-positioned to cater to a vast consumer base. C&S’s profound industry expertise and robust financial backbone make it an ideal choice to continue the legacy of the divested stores and facilities.

Both CEOs of Kroger and Albertsons have expressed their confidence in C&S, emphasizing their commitment to existing agreements and the welfare of employees.

The divestiture includes 413 stores and well-recognized brands such as QFC, Mariano’s, and Carrs. Some retained stores will undergo re-branding after the transaction. The deal will also include divesting private label brands like Debi Lilly Design and ReadyMeals. The geographic distribution of stores spans across multiple states, including Washington, California, and Texas. Washington state has 104 Albertsons Cos. and Kroger stores to divest—the most of any state.

The merger signifies a monumental shift in the grocery sector, with two major players coming together to provide enhanced value for consumers and fortify their market presence against bigger competitors.


 

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