Kroger, Albertsons to divest more than 400 stores, eight DCs in $1.9B deal

The Kroger Co. and Albertsons Companies Inc. are offloading some stores and distribution centers in connection with their proposed merger. 

The two supermarket giants have entered into an agreement to sell 413 stores (locations at end of article) and eight distribution centers across 17 states to C&S Wholesale Grocers LLC for $1.9 billion in cash as part of the plan to gain regulatory approval of Kroger’s planned acquisition of Albertsons, which was annouced in October 2022.  The deal also includes two offices and five private label brands.

C&S, the largest wholesale grocery supply company in the U.S., also operates Grand Union grocery stores and Piggly Wiggly  franchise and corporate-owned stores in the Midwest and Carolinas.

“Following the announcement of our proposed merger with Albertsons Cos., we embarked on a robust and thoughtful process to identify a well-capitalized buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today,” stated Kroger chairman and CEO Rodney McMullen. “C&S achieves all these objectives. C&S is led by an experienced management team with an extensive background in food retail and distribution and has the financial strength to continue investing in associates and the business for the long run.”

 McMullen added that, importantly in the agreement with C&S, the company commits to “honoring all collective bargaining agreements which include industry-leading benefits, retaining frontline associates and further investing for growth."

In a joint release, Kroger and Albertsons said the store divestiture plan fulfills the commitments the two companies set out in their original merger agreement in October 2022 with regard to divesting stores, including:

• Extending a competitor to new geographies through the sale of stores to a well-capitalized buyer that is led by seasoned operators with a strong balance sheet and a sound business plan;
• Ensuring that no stores will close as a result of the merger;
• Maintaining all current collective bargaining agreements, which include industry-leading healthcare and pension benefits, bargained-for wages, and ensuring frontline associates remain employed; and
• Committing to invest in associates and stores for the long term.

The number of stores contained in the divestiture plan by geography is as follows:

• Wash.: 104 Albertsons Cos. and Kroger stores
• Calif.: 66 Albertsons Cos. and Kroger stores
• Colo.: 52 Albertsons Cos. stores
• Ore.: 49 Albertsons Cos. and Kroger stores
• Texas/La.: 28 Albertsons Cos. stores
• Ariz.: 24 Albertsons Cos. stores
• Nev.: 15 Albertsons Cos. stores
• Ill.: 14 Kroger stores
• Ark.: 14 Albertsons Cos. stores
• Idaho: 13 Albertsons Cos. stores
• N.M.: 12 Albertsons Cos. stores
• Mont./Utah/Wyo: 12 Albertsons Cos. stores
• DC/Md./Va: 10 Harris Teeter stores

All of the above stores (regardless of banner) will be divested by Kroger following the closing of the merger with Albertsons Cos.