The Kenai and Soldotna Safeways are on a list of stores Albertsons plans to divest as it pursues an almost $25 billion merger with Kroger. The two companies on Wednesday published a list of almost 600 stores they plan to divest, including 18 in Alaska.
In a video statement, the heads of Albertsons and Kroger called Wednesday’s divestment plan a “significant step” toward completing the merger, which was announced last October. Albertsons Chief Executive Officer Vivek Sankaran said the companies were mindful about selecting which stores to divest.
“This merger is the right thing for our customers and our associates,” Sankaran said. “For our customers, we've strengthened the American retail landscape, and thoughtfully selected stores to ensure customers continue to have a choice of where to shop.”
But what does divestment actually mean? According to the companies, no store closures. Kroger and Albertsons already have a buyer for the almost 600 stores they plan to sell off: C&S Wholesale Grocers. That company is the largest wholesale grocery supply company in the country, and boasts such subsidiaries as Piggly Wiggly and Grand Union.
“To be clear, divested stores are not closed stores,” said Kroger Chair and CEO Rodney McMullen in the video. “C&S is committed to operating these stores as they are today.”
McMullen said the new buyer has committed to maintaining existing wages and benefits for employees. Kroger employs more than 3,200 associates across its 11 stores in Alaska. Alaska Business Magazine reported in 2020 that Carrs/Safeway employs more than 2,600 people in Alaska.
“Importantly, C&S will honor all collective bargaining agreements and ensure associates have the great health care, benefits and pensions as they do today. It has committed that no stores will close and no frontline workers will be laid off as part of this agreement.”
All members of Alaska’s Congressional delegation oppose the merger. They fear it could lead to store closures and higher grocery prices around Alaska, where there are already limited grocery stores and high prices.
Democratic U.S. Rep. Mary Peltola helped lead opposition efforts, including holding town halls to gather public input and penning a letter to the Federal Trade Commission asking that the commission block the merger. Her efforts took a step forward in February, on the same day she delivered her annual address to a joint session of the Alaska Legislature.
“Today, Alaska has convinced the Federal Trade Commission to sue to block the Kroger-Albertsons merger,” she said.
In the same speech, Peltola pointed to the central peninsula as an example of a community where stores are busy even though there’s two of them.
“Talking on the Kenai about Fred Meyer and Carrs being neighboring parking lots, neighboring stores, but both parking lots are always open,” she said. “We had so many Alaskans saying they do cost check, they do price check before they purchase things. That helps keep our prices much lower when there’s that kind of healthy competition.”
In its suit, the FTC said the merger, if it goes through, would be the largest supermarket merger in U.S. history. The commission said the move would eliminate competition between the two companies, drive prices up for essential household items and lead to lower quality products and services.
Peltola joined Alaska lawmakers in decrying the companies’ divestiture plan on social media this week. Sen. Lisa Murkowski called C&S Wholesale Grocers “untested and untried in Alaska” and said the list published Wednesday has only intensified her doubts about the merger. Sen. Dan Sullivan joined Murkowski in calling on the FTC to block the merger and celebrated the suit in February.
The merger still needs final approval from federal regulators before it can go through. If it does, store locations in 10 Alaska communities would be impacted. All the stores proposed for divestment are Safeway or Carrs locations.
