Kroger to sell 63 California supermarkets as part of Albertsons merger

Supermarket giant Kroger Co. announced plans to offload more than 60 supermarkets in California as part of its planned merger with Albertsons.

The 63 supermarkets — primarily in Southern California — are among hundreds of stores, distribution centers and plants on a list the companies released on Tuesday identifying which ones it plans to sell to C&S Wholesale Grocers. The sale, however, would occur only if federal regulators approve Kroger’s bid to buy its smaller rival Albertsons.

The grocery store chains proposed to sell off a package of stores and other facilities to allay regulators’ concerns about the megamerger, upping the number to 579 from 413 in April after the Federal Trade Commission blocked the deal this year.

The sale of hundreds of stores and facilities was valued at $2.9 billion in April.

The 63 California stores listed consist of 15 Albertsons locations, including two in Huntington Beach; 31 Vons locations, including the store on Fairfax Avenue in Los Angeles, as well as the location on West 3rd Street; 16 Pavilions locations; and one Safeway in the Bay Area.

The companies have started notifying workers at affected locations, Chief Executive Rodney McMullen wrote in a memo to employees Tuesday, Bloomberg reported.

Workers will become employees of C&S Wholesale Grocers after the transaction closes, McMullen wrote. C&S has committed to transferring pay and health plans and assuming all collective bargaining agreements, he added.

In February, the FTC announced it was suing to block the merger, arguing the joining of the two businesses would obliterate competition, leading to higher prices and lower-quality products for millions of Americans.

The grocers, which announced their $25-billion merger in October 2022, are sharing the list ahead of a trial expected in August that will determine the fate of their deal.

A coalition of United Food and Commercial Workers union locals in California has opposed the merger, organizing protests and meetings with grocery company representatives as well as state and federal and state regulators.

“We remain focused on stopping the proposed mega-merger for the same reasons we have stated since it was first announced over 20 months ago — because we know it would harm workers, it would harm shoppers, it would harm suppliers and communities, and it is illegal,” five UFCW locals said in a statement Tuesday.

Kroger and Albertsons say they need the merger to compete with larger, nonunionized rivals, Walmart and Costco. The companies have pledged to invest $500 million to cut prices and $1 billion to raise worker wages and benefits, in addition to $1.3 billion to improve Albertsons stores.

Kathy Finn, a longtime leader at United Food and Commercial Workers Local 770 in Southern California, said this year that the proposed merger would “impact California as much or more than any other state.”

UFCW Local 770 represents nearly 30,000 members in Los Angeles, Santa Barbara, Ventura, San Luis Obispo and Kern counties in the grocery, cannabis, retail drug, healthcare and packing industries.

Other stores listed for sale include 124 supermarkets in Washington state, 101 in Arizona and 91 in Colorado.

Bloomberg contributed to this report.

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