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Kroger and Albertsons announced plans Friday to sell 413 stores to C&S Wholesale Grocers for $1.9 billion, a key step in receiving FTC approval to complete the two grocery chains’ merger.
The deal with C&S, a New Hampshire-based grocery company which owns chains Piggly Wiggly and Grand Union, includes the sale of the QFC, Mariano’s, and Carrs banners and exclusive licensing rights to use the Albertsons name in Arizona, California, Colorado, and Wyoming, along with eight distribution centers, two offices, and five private label brands in 17 states and the District of Columbia.
- The transaction also includes a possibility for Kroger to require C&S to buy as many as 237 more stores to secure Federal Trade Commission approval for the Albertsons merger, potentially bringing the total stores sold to 650. Kroger and Albertsons operated 4,996 total stores prior to the deal.
Kroger said the move ensures there will be no store closure or frontline jobs lost due to the merger, a promise Kroger CEO Rodney McMullen previously made in a Senate subcommittee meeting last year. McMullen also said in a statement that C&S will honor all bargaining agreements with employees as part of the transaction.
The two chains announced the $24.6 billion transaction last October in an effort to compete with rivals Walmart and Amazon. Though they said the deal is still on track to close in early 2024, it’s facing plenty of pushback from grocery workers unions and consumers, along with rigorous FTC review.
Kroger also released its second-quarter earnings today, reporting a 2% drop in sales, but a 1.1% rise excluding fuel, reaffirming its full-year guidance of a 1% to 2% sales increase, excluding fuel.
“While industry-wide disinflation continues to impact food at home sales, our team is doing an excellent job managing the effect on our business,“ CFO Gary Millerchip said in a statement. “Looking forward, we believe inflation will continue to decelerate and the environment will remain challenging for consumers.”