The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what’s to come.
If the Kroger-Albertsons deal closes as it’s currently proposed, C&S Wholesale Grocers is slated to acquire at least 413 divested stores across 17 states and Washington, D.C., from the grocery giants, along with five private brands and several distribution centers.
The divestiture plan would transform C&S from a regional grocer into a national player. But a lawsuit filed this week by Colorado Attorney General Philip J. Weiser that aims to block the Kroger-Albertsons merger calls into question if C&S has the employees, distribution centers and private label experience to support the divested assets.
What C&S’s store footprint would look like if the divestiture deal gets approved
The lawsuit points out that C&S only sells a handful of private labels in its stores, does not have a data analytics platform nor a modern loyalty program, and only operates one retail pharmacy. With a footprint of 23 owned and operated stores in New York, Vermont, Pennsylvania and Wisconsin along with its franchised locations under the Piggly Wiggly banner, C&S has a fraction of the retail locations that it would gain with the divested stores.
C&S would pick up 52 Albertsons stores in Colorado — a state where C&S does not currently have any stores — while Kroger and Albertsons plan to retain 201. The lawsuit claims that the divestiture deal does not give C&S enough stores in Colorado to provide it with adequate scale to effectively compete post-merger. It also flagged quality concerns with the divested stores.
“C&S is not well situated to be a viable competitor because of its complete lack of experience as a national-scale retailer, lack of any experience in Colorado, and its lack of the infrastructure needed to replace the competition lost from [Albertsons] — infrastructure that Kroger plans to keep for itself,” the lawsuit says.
Although Kroger and Albertsons have sought to distance themselves from Haggen’s ill-fated purchase of divested Safeway stores in 2015, Weiser sees a direct connection between that deal and the proposed plan with C&S.
“The competition promised by the Haggen divestiture proved to be a sham,” the lawsuit noted.
In case you missed it
Oxendales Market abruptly shutters store near Mall of America
The Minneapolis-area grocery chain suddenly closed a location in Bloomington, Minnesota, earlier this month, a setback to the Minneapolis suburb’s drive to encourage the development of a walkable community near the megamall, the Minneapolis Star Tribune reported.
Oxendales did not indicate why it stopped operating the 14,000-square-foot store, which opened in November on the first floor of a newly constructed apartment building, according to the newspaper. “We are actively exploring opportunities to fill the vacant space with a new tenant that will complement the vibrant atmosphere of the neighborhood,” McGough, the company behind the development where the store was located, told the Star Tribune in a statement.
Mercatus unveils online customization tool
The e-commerce technology company on Tuesday announced that it has launched a system designed to help regional and independent grocers develop personalized experiences for shoppers. The tool, known as AisleOne, is aimed at giving retailers with limited in-house technical resources the ability to use data about customer behavior to individualize their online shopping programs.
More people are becoming diet-conscious
Fifty-two percent of U.S. adults adhere to a specific eating pattern or diet, up from 43% a year ago, the National Grocers Association noted in a Monday blog post about a webinar the trade association recently hosted with experts from SPINS.
NGA also cited data showing that half of shoppers “actively participate” in loyalty programs, with 59% using loyalty points to cut costs and 70% redeeming digital coupons. In addition, over than three-quarters (76%) of consumers are more likely to buy from companies that use personalized outreach programs, according to the association
Number of the week: $500 million
That’s the amount Kroger intends to direct toward reducing prices for shoppers if it’s able to merge with Albertsons, the grocer announced on Tuesday.
What’s ahead
Upcoming earnings
Walmart plans to share its fiscal year 2024 and fourth-quarter earnings on Tuesday, and Sprouts Farmers Market will report its latest results on Thursday.
Impulse find
A Super Bowl love story
H-E-B’s game day commercial was meant to remind customers that there’s something to fall in love with in every store aisle.
The grocer’s spot this past Sunday included swoony music and falling rose petals that “flirtatiously showcase[d] an array of popular H-E-B brand products that turn heads,” a press release said.
The ad aired during the Super Bowl’s third and fourth quarters across a dozen Texas markets and will continue to air through March throughout the state.
