Kroger and Albertsons will offload 91 grocery stores in Colorado if the companies prevail over lawsuits and regulatory opposition to the merger of the two major supermarket chains.
The stores on the list of those to be sold to C&S Wholesale Grocers are spread across the state, ranging from Alamosa and Cortez to Fraser and Frisco with some in metro Denver. Two Albertsons stores are on the list to be sold. The rest are Safeways. That’s the most of the 105 Albertsons and Safeways in the state.
A dairy, an entire distribution center and part of another in Denver would also be part of the deal with grocers C&S Wholesale.
Kroger, which owns King Soopers and City Market stores, and Albertsons, the parent company of Safeway, announced the proposed $24.6 billion merger in October 2022. Since then, Colorado Attorney General Phil Weiser has filed a lawsuit challenging the merger on the grounds that it would eliminate competition and harm buyers, workers and suppliers.
In June, a Denver district judge denied a motion by Kroger and Albertsons to dismiss Weiser’s lawsuit.
The Federal Trade Commission sued in February to block the merger between the grocery giants, saying it would eliminate competition and raise prices for millions of Americans. An administrative hearing by the FTC is scheduled to begin on July 31.
Washington state Attorney General Bob Ferguson filed a lawsuit against the merger in January.
Kroger and Albertsons have said the merger would better position them to compete against out-of-union national discount grocers such as Walmart and Costco. Kroger has said the merger would generate $1 billion in higher wages, expanded benefits, long-term job security and a strong unionized workforce.
But the United Food and Commercial Workers Union, which opposes the consolidation, believes the grocers released the list of stores on Tuesday in an attempt to influence the courts and create the perception that the merger is close. Kim Cordova, president of UFCW Local 7, which represents workers in Colorado and Wyoming, said the union has requested the list of stores targeted for sale several times but has not received it.
“The workers wanted to know. It causes anxiety for our membership, it causes a lot of uncertainty,” Cordova said. “Companies have not been transparent throughout this process.
Kroger said in an email that from the outset, it has committed to sharing information, including the specific list of affected locations and associates.
“We are now at the point in the process where we can begin to provide those details. Because we started informing affected associates, we were able to share the list publicly. We contacted local unions at the same time we were notifying associates,” Kroger said in its statement.
Since the announcement of the proposed merger, the supermarket chains have increased the number of stores it would sell to C&S Wholesale Grocers. Kroger and Albertsons initially said the plan was to sell about 50 stores in Colorado to the Texas-based company.
The latest plan includes the sale of a total of 579 stores along with six distribution centers and a dairy plant.
Kroger owns 148 stores in Colorado, which operate under the King Soopers and City Market banners.
The $1.9 billion deal to sell some of the companies’ stores to C&S Wholesale Grocers is intended to boost competition when Kroger and Albertsons consolidate. Cordova said employees fear a repeat of what happened when Albertsons bought Safeway in 2015. Haggen, a small supermarket chain based in Washington state, bought some of the stores and in less than a year filed for bankruptcy.
As a result, about 40 stores were permanently closed in Colorado and Wyoming, Cordova said. The union does not believe C&S has enough experience with grocery stores and pharmacies to compete with a consolidated Kroger and Albertsons.
“These are the main grocery stores where people go for their food, fuel and pharmacy,” Cordova said.
Union officials have said fewer options in the food industry will lead to higher prices for customers and erode the bargaining power of union members.
“It is not (President) Biden who is responsible for these awards. It is corporate America that is being allowed to get away with all this consolidation,” Cordova said.
An Albertsons spokesman said in an email that both companies are committed that no front-line employees will lose their jobs and no stores will close as a result of the merger.
“C&S is a well-capitalized industry leader in wholesale food supply – currently serving more than 7,500 independent supermarkets, chain retail stores and military bases – with a strong history as a successful grocery retailer “, Albertsons said in the statement.
Asked whether the stores sold to C&S would carry the Safeway name, a C&S spokeswoman said in an email that the transaction is not final and the deal is subject to Kroger and Albertsons resolving pending court cases.
“The acquisition of these stores will enable C&S to be one of the leading grocery retailers in the United States,” the statement said. “To ensure these stores continue to thrive, we will also welcome back hundreds of highly skilled grocery retail veterans and tens of thousands of store associates from Kroger and Albertsons who are currently responsible for these stores.”