24 Albertsons Supermarkets in Arizona to be Sold in Kroger Merger

Article originally posted on AZ Central on September 11, 2023

Some 24 Albertsons stores in Arizona, roughly one-fifth of the locations the company owns here, will have new ownership, under a divestiture agreement announced Friday that’s pegged to the Kroger-Albertsons merger.

The stores will be sold to C&S Wholesale Grocers under an agreement with Albertsons Cos. and Kroger Co., which are planning to merge under a deal announced last October. The companies currently each own about 130 stores in Arizona, raising the specter of excessive overlap in certain communities.

Kroger, which owns Fry’s Food Stores in Arizona, and Albertsons said the divestiture plan marks a key next step toward the completion of the merger introducing a well-capitalized competitor into Arizona and other states.

“The divestiture plan ensures no stores will close as a result of the merger and that all frontline associates will remain employed, all existing collective bargaining agreements will continue and associates will continue to receive industry-leading health care and pension benefits alongside bargained-for wages,” the companies said in a statement.

All told, 413 stores in 17 states and Washington, D.C., will be sold under the plan. Most are located in Western states. Specific Arizona locations that will be affected, and those in other states, were not disclosed.

C&S is a leader in wholesale grocery supply. It was founded in 1918 as a supplier to independent grocery stores and today supplies more than 7,500 independent supermarkets, retail chain stores and military bases. It currently operates the Grand Union and Piggly Wiggly chains 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. C&S achieves all these objectives,” said Rodney McMullen, Kroger’s chairman and CEO, in a prepared statement.

“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,” he continued. “Importantly in our agreement, C&S commits to honoring all collective bargaining agreements which include industry-leading benefits, retaining frontline associates and further investing for growth.”