"The deal, which is expected to close in 2024, would combine two of the largest supermarket chains in the country and create one of its largest private employers," reports CNN today. "The two companies have a combined 710,000 workers – most of them unionized in an industry with low union rates – nearly 5,000 stores and more than $200 billion in sales. The companies say they reach 85 million households." It will be the largest supermarket chain in the U.S. (read more)
The deal is not yet complete, of course. On Friday, Sept. 8 it was reported by Bloomberg that, "Kroger Co. rose the most in six months after agreeing to sell 413 stores to C&S Wholesale Grocers in a divestiture designed to help win antitrust approval for its $24.6 billion merger with Albertsons Cos."
That article continued:
The FTC still could sue to block the Albertsons deal. Labor unions and officials from a range of states have urged the regulator to oppose the merger, saying it would hurt wages and competition. Some senators and members of Congress have also criticized the transaction.
Still, Kroger said the acquisition remains on track to close in early 2024, and [Kroger CEO Rodney] McMullen has vowed to fight in court if necessary. The divestiture plan ensures that no stores will be closed in connection with the Albertsons merger, he said. Frontline workers will remain employed and existing collective-bargaining agreements will continue. [My emphasis added]
Time will tell what will happen to employees at Kroger and Albertsons. What's basically being said is that the divestiture plan will not cause any layoffs. But those employees, along with the 413 stores being sold to C&S Wholesale Grocers, are essentially being shunted off to a third party. The real question, in my opinion, is what will happen to them as C&S employees.
C&S is also a giant in the grocery industry. According to Winsight Grocery Business:
Currently, C&S operates 160 stores, mostly under the Piggly Wiggly banner in the Midwest and Carolinas but also including 11 stores under the Grand Union banner in upstate New York and Vermont. Overall, C&S licenses the Piggly Wiggly banner to approximately 500 independently owned and operated supermarkets in 17 states via its Piggly Wiggly LLC subsidiary.
Thus, the Kroger-Albertsons divestitures, if approved, would give C&S a grocery retail network of about 1,073 stores, which under the companies’ agreement could grow to 1,310 locations if regulators call for more divested stores. [My emphasis added]
Meanwhile, AP reported that Kroger recently "had a $1.4 billion opioid settlement tagged to its recent financial sheet, and total company sales — $33.9 billion — were down compared to Q2 2022 when they were $34.6 billion. Sales excluding fuel, however, did increase 1.1% year-over-year." That is not expected to affect the Albertsons deal.
Related:
- Kroger and Albertsons Companies Announce Comprehensive Divestiture Plan with C&S Wholesale Grocers, LLC in Connection with Proposed Merger - PR Newswire, Sept 2023
- Pharma Companies, Pharmacies Agree to Pay $19B in Opioid Settlement - BioSpace, June 2023
- After Cutting Hazard Pay, Kroger Gives Workers New Bonus - AP, May 2020
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