San Diego/ Retail & Industry
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Published on July 10, 2024
Kroger and Albertsons Plan Divestiture of 63 California Stores, Including 11 in San Diego, Amid Merger ScrutinySource: Google Street View

Kroger and Albertsons, two of the country's largest grocery chains, have outlined intentions to offload 579 stores nationwide as part of a potential merger that has raised the eyebrows of federal regulators due to concerns about stifling competition. NBC San Diego reports that 63 California stores, including nearly a dozen from San Diego County, are on the divestiture list.

As detailed by the companies, these transactions are set to be carried out with C&S Wholesale Grocers, with a price tag of $2.9 billion. A Kroger spokesperson assured, as mentioned in a report by FOX 5 San Diego that there would be a retention of frontline employees without store closures, as C&S has committed to ensuring "zero stores will close as a result of the merger, all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading benefits alongside bargained-for wages".

However, the Federal Trade Commission (FTC) is legally contested by this proposed merger. The FTC argues that the $24.6 billion deal could lead to an escalation in grocery prices and a regression in workplace conditions, indicative of reduced market competition. Previously, the FTC had rejected an earlier divestiture proposal that involved selling fewer stores to the same wholesaler. According to FOX 5 San Diego, the extensive trial for the lawsuit is arranged to start in Oregon's federal court on August 26.

The reactions among those directly impacted are mixed, with the United Food and Commercial Workers union firmly opposing the merger. "Today's announcement changes nothing," a statement from the union states, reinforcing the skepticism surrounding the supposed benefits Kroger claims the merger would offer consumers and workers alike. Kroger's CEO reportedly communicated with employees at the affected stores about the proposed changes, mirroring a narrative of opportunities rather than drawbacks in the face of this major restructuring, as per NBC San Diego.