The Kroger Co. has identified the Safeway at 1635 E. Cottonwood Street in Cottonwood as one of the 579 U.S. Safeway stores that it plans to sell to C&S Wholesale Grocers to avoid antitrust proceedings that could result from its proposed $24.6 billion merger with Albertsons Companies Inc.
The sale is conditional on the merger going through.
The merger, which would be one of the largest retail takeovers in American economic history, would follow the 2015 merger of Albertsons and Safeway, which created the second-largest grocery chain in the country after Kroger.
The merger is currently facing a February lawsuit filed by the Federal Trade Commission to block the proposal on the grounds that it is anticompetitive.
“This supermarket megamerger comes as American consumers have seen the cost of groceries rise steadily over the past few years,” said Henry Liu, Director of the FTC’s Bureau of Competition. “Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today. Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing and their working conditions deteriorating.”
The FTC has also found Kroger’s proposed divestiture plan to be inadequate in addressing the loss in competition between Albertsons and Kroger.
“Kroger’s and Albertsons’ loyalty data indicates that their overlapping supermarkets compete for the same customer base, drawing shoppers from the same local communities,” the FTC lawsuit stated. “Today, Kroger and Albertsons engage in aggressive price competition that benefits these consumers.”
The two companies contend that the merger would help them compete against retailers such as Amazon, which has a market capitalization of over $2 trillion and owns Whole Foods, and Walmart, which has a market capitalization of $558 billion and has been expanding into grocery sales over the last two decades.
