Two years in the past, Kroger and Albertsons introduced plans to merge right into a single firm, which might create the second-largest grocery retail chain within the nation, behind solely Walmart. Critics of the deal have argued that this consolidation would result in larger costs and lowered pay and advantages for employees, and the Federal Commerce Fee and state attorneys normal in Washington and Colorado have sued the grocery giants in hopes of blocking it. In an try to get regulators to approve the deal, Kroger and Albertsons promised to divest from a whole lot of shops to dilute their mixed market energy.
This week they got here out with the checklist of 579 shops that might be offered to a New Hampshire–based mostly firm known as C&S Wholesale Grocers, and it will have a big effect on the Seattle metro space. A whopping 124 shops in Washington — greater than every other state — had been on the checklist, together with “almost 70 within the Seattle space,” reviews the Seattle Instances. That features 12 QFCs and three Safeways in Seattle, plus extra, the paper says:
Different Seattle-area divested areas embrace 5 QFC shops in Bellevue, two QFC shops and three Safeway shops in Tacoma, two Safeway shops and two QFC shops in Kirkland, and three QFC shops and one Safeway retailer in Redmond. No Fred Meyer areas look like on the checklist of divested shops.
The first concern for customers is that these shops will finally shut after being offered. C&S Wholesale Grocers, as its title suggests, is usually a distributor, although it operates the Piggly Wiggly and Grand Union grocery chains. Critics of the deal contend that C&S doesn’t have the assets or know-how to successfully run the spun-off Kroger/Albertsons shops and should shut some — which is what occurred a decade in the past when Albertsons offered 146 shops to a sequence known as Haggen, which later filed for chapter and sued Albertsons (unsuccessfully) for not offering help that it had promised within the deal.
In a February court docket submitting, Bob Ferguson, the Washington legal professional normal, drew a direct comparability between the Haggen fiasco and the proposed sale of shops, writing, “C&S shouldn’t be a sufficiently established and complex competitor to revive the competitors that will probably be misplaced if Kroger is permitted to accumulate a longtime, profitable competitor like Albertsons.” Ferguson additionally famous that “as a result of this divestiture proposal disproportionately impacts Washington shops, the failure of this proposed divestiture can be notably dangerous right here.”
Including to the uncertainty is that C&S has not dedicated to retaining open all of the shops it can purchase. In keeping with the Seattle Instances, when C&S reps met with the United Meals and Business Employees union, they “refused to affirm the sooner promise by Kroger and Albertsons that no areas would shut on account of the merger.” (C&S didn’t instantly reply to a request to remark from Eater Seattle.)
There’s nonetheless an opportunity this merger might not change into actuality. There are a number of court docket dates arising within the subsequent a number of months, and the Instances reviews that some specialists suppose that if the Federal Commerce Fee will get an injunction quickly blocking the deal, Kroger and Albertsons may abandon it altogether.