Kroger-Albertsons merger could lead to sale of 91 grocery stores in Colorado

A sign is posted outside a Safeway grocery store in Denver, Wednesday, Feb. 14, 2024. Colorado Attorney General Phil Weiser announced the filing of a lawsuit to block the Kroger-Albertsons merger on the grounds that it would eliminate competition during a news conference Wednesday in Denver. (AP Photo/David Zalubowski)

Kroger and Albertsons plan to sell 91 grocery stores in Colorado if they can overcome lawsuits and regulatory resistance to a 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, from Alamosa and Cortez to Fraser and Frisco, with some in the Denver metro area. Two Albertsons stores are on the list of stores to be sold. The rest are Safeways.

Kroger, which owns King Soopers and City Market stores, and Albertsons, Safeway’s parent company, announced the planned $24.6 billion merger in October 2022. Since then, Colorado Attorney General Phil Weiser has filed suit against the merger, arguing that it would eliminate competition and harm shoppers, workers and suppliers.

In June, a district judge in Denver denied a motion by Kroger and Albertsons Companies to dismiss Weiser’s lawsuit.

The Federal Trade Commission filed suit in February to block the merger of the two grocery giants, arguing that it would eliminate competition and drive up prices for millions of Americans. An FTC administrative hearing is scheduled to begin on July 31.

Washington State Attorney General Bob Ferguson filed suit against the merger in January.

Kroger and Albertsons have said the merger would allow them to better compete with national, non-union discounters such as Walmart and Costco. Kroger said the merger would bring $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 merger, believes the grocers released the list of stores on Tuesday to influence the courts and create the impression that the merger is close to completion. Kim Cordova, president of UFCW Local 7, which represents workers in Colorado and Wyoming, said the union has requested the list of stores for sale several times but never received it.

“The workers wanted to know. It scares our members, it causes a lot of uncertainty,” Cordova said. “The companies have not been transparent throughout the process.”

Kroger said in an email that the company was committed from the start to sharing information, including a specific list of affected locations and partners.

“We are now at the point in the process where we can begin providing those details. As we have begun notifying affected employees, we have been able to make the list public. We have reached out to local unions at the same time as notifying employees,” Kroger said in its statement.

Since announcing the planned merger, the supermarket chains have increased the number of stores they plan to sell to C&S Wholesale Grocers. Kroger and Albertsons had originally said they wanted to sell about 50 stores in Colorado to the Texas-based company.

The latest plan envisages the sale of a total of 579 stores as well as six distribution centers and a dairy.

Kroger owns 148 stores in Colorado that operate under the King Soopers and City Market names. Albertsons operates 105 Safeway and Albertsons stores in the state.

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 merge. Cordova said employees fear a repeat of what happened when Albertsons acquired Safeway in 2015. Haggen, a small supermarket chain based in Washington state, bought some of the stores and filed for bankruptcy in less than a year.

As a result, about 40 stores in Colorado and Wyoming have had to close permanently, 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 large grocery stores where people go to buy food, fuel and medicine,” Cordova said.

Union representatives have said that reduced choice in the food sector will lead to higher prices for customers and weaken the bargaining power of union members.

“(President) Biden is not responsible for these prices. It is the American economy that is getting away with this consolidation,” Cordova said.

An Albertsons spokesperson said in an email that both companies have committed to not losing any service employees or closing any stores as a result of the merger.

“C&S is a well-capitalized industry leader in the wholesale grocery distribution industry – currently serving more than 7,500 independent supermarkets, retail chains and military bases – and has a long history of being a successful grocery retailer,” Albertsons said in the statement.

When asked whether the stores sold to C&S would retain the Safeway name, a C&S spokeswoman responded in an email that the transaction was not final and the agreement was contingent on Kroger and Albertsons settling pending cases in court.

“The purchase of these stores will make C&S one of the leading grocers in the United States,” the statement said. “To ensure these stores continue to thrive, we will also welcome hundreds of highly qualified, experienced grocery retailers and tens of thousands of Kroger and Albertsons store employees who are currently responsible for these stores.”