Kroger and Albertsons would unload 91 grocery stores in Colorado if the companies prevail over lawsuits and regulators’ opposition to a merger of the two large supermarket chains.
The stores on the list of ones that would be sold to C&S Wholesale Grocers are spread across the state, ranging from Alamosa and Cortez to Fraser and Frisco with several in metro Denver. Two Albertsons stores are on the list of those to be sold. The rest are Safeways. That’s the bulk of the 105 Albertsons and Safeways in the state.
A dairy plant, an entire distribution center and part of another one in Denver would also be part of the deal with C&S Wholesale grocers.
Kroger, which owns King Soopers and City Market stores, and Albertsons, 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 opposing the merger on grounds that it would eliminate competition and harm shoppers, workers and suppliers.
In June, a Denver district judge rejected a motion by Kroger and Albertsons Companies 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 drive up prices for millions of Americans. An administrative hearing by the FTC is scheduled to start July 31.
Washington state Attorney General Bob Ferguson filed a lawsuit against the merger in January.
Kroger and Albertsons have said merging would better position them to compete against national, nonunion 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 Tuesday in an attempt to influence the courts and create the perception that the merger is close to being final. Kim Cordova, president of UFCW Local 7, which represents workers in Colorado and Wyoming, said the union had requested the list of stores targeted for sale several times but didn’t get it.
“The workers wanted to know. It causes anxiety for our membership, it causes a lot of uncertainty,” Cordova said. “The companies have not been transparent during this whole process.”
Kroger said in an email that from the start, 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 providing those details. Because we began to inform affected associates, we were able to share the list publicly. We reached out to the local unions at the same time we were notifying associates,” Kroger said in its statement.
Since announcing 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 selling a total of 579 stores along with six distribution centers and one 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 spur competition when Kroger and Albertsons consolidate. 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 in less than a year filed for bankruptcy.
As a result, roughly 40 stores closed permanently in Colorado and Wyoming, Cordova said. The union doesn’t believe C&S has enough experience with grocery stores and pharmacies to compete with a consolidated Kroger and Albertsons.
“These are major grocers where people go for their food, fuel and pharmacy,” Cordova said.
Union officials have said fewer options in the grocery industry will lead to higher prices for customers and erode union members’ bargaining power.
“It’s not (President) Biden who’s responsible for these prices. It’s corporate America that’s allowed to get away with all this consolidation,” Cordova said.
An Albertsons’ spokesperson said in an email that both companies have committed to no frontline workers losing their jobs and no stores closing as a result of the merger.
“C&S is a well-capitalized industry leader in wholesale grocery supply—currently serving more than 7,500 independent supermarkets, retail chain stores, and military bases—with a strong track record as a successful grocery retailer,” Albertsons said in the statement.
Asked if stores sold to C&S would retain the Safeway name, a C&S spokeswoman said in an email that the transaction is not final and the agreement is subject to Kroger and Albertsons resolving the pending cases in court.
“The purchase of these stores will enable C&S to be one of the leading grocery retailers in the United States,” the statement said. “In order to ensure these stores continue to thrive, we also will be welcoming 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.”