Kroger, the grocery company overseeing Fred Meyer and several regional chains, has announced its intention to sell over 60 stores in Oregon if its proposed merger with Albertsons, the owner of Safeway, receives approval. The merger, valued at $24.6 billion, has faced opposition from federal regulators since February.
The Federal Trade Commission (FTC) filed a lawsuit to block the merger, claiming that it would negatively impact workers and customers. In a press release, the FTC argued that the deal would eliminate competition between Kroger and Albertsons, potentially leading to higher prices for groceries and essential household items.
In response to the regulatory concerns, Kroger has made an offer to sell nearly 580 stores to another competitor, C&S Wholesale Grocers, in an effort to address the antitrust concerns raised by the FTC. This amended divestiture package includes over 150 more locations than a previous proposal put forth last year. Kroger stated in an April press release that this move is intended to strengthen their position in the regulatory challenges and court proceedings surrounding the proposed merger. The company has now identified the specific stores it plans to divest, including two locations in Eugene – the Safeway on 18th Avenue and Pearl Street, and the Albertsons off of River Road and Division Avenue.
As part of the sale, Kroger would acquire QFC, a brand that is more familiar to some in the state and already has several locations in Portland. However, federal regulators have expressed skepticism about C&S’s ability to become a significant competitor to a combined Kroger-Albertsons entity. A hearing on the merger is scheduled for August 26 in the U.S. District Court in Portland.
The impact of the merger and subsequent divestiture would extend beyond Eugene, affecting dozens of other stores across Oregon, including locations in Bend, Redmond, Corvallis, Florence, and Newport. If the merger is approved, C&S would acquire 21 new locations in Portland alone.
In April, Kroger assured frontline workers that their jobs would be secure during the transition and that no stores would be closed as a result of the merger. C&S Wholesale Grocers, the potential acquirer of the divested stores, currently supplies over 7,500 independent supermarkets in the United States. The company also owns Piggly Wiggly and Grand Union, two grocery chains that do not have locations in Oregon, according to their website.
The outcome of the merger and subsequent divestiture will have significant implications for the grocery industry in Oregon, impacting both consumers and employees. The regulatory proceedings and court hearing in August will determine the course of action for Kroger, Albertsons, and the affected stores in the state.
