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.
The Kroger-Albertsons merger has only been dead for a couple of months and already it’s haunting a mega deal taking shape in another industry.
Seven months ago, Alimentation Couche-Tard, the second-largest convenience store operator in the U.S. by store count, submitted an audacious bid to acquire Seven & i Holdings, the Japanese owner of 7-Eleven, the largest c-store operator in the U.S. The acquisition would create a massive convenience company in the U.S., not to mention globally, with around 100,000 combined locations across the world.
But first, the two companies are considering the antitrust concerns that come with this blockbuster deal. And the issues that cropped up when the first and second largest U.S. supermarket chains tried to combine have them a bit spooked.
“The cautionary tale of the Albertsons-Kroger transaction clearly demonstrates the risks of consumer-facing retailers looking to divest thousands of stores without a buyer that is market-tested and well positioned to preserve the competitive landscape,” Seven & i wrote in a letter to shareholders this week.
Seven & i, which cited divestiture concerns as one reason for not yet agreeing to the merger with Couche-Tard, estimates a deal will require the companies to divest upwards of 2,000 stores — more than three times as many locations as Kroger and Albertsons said they would divest. No single c-store chain rises to the top as a possible acquirer of what would almost certainly be a sprawling, nationwide cache of stores, including many urban locations. That could be a problem, since the skewering of C&S Wholesale Grocers — Kroger and Albertsons’ divestiture target — by a federal and state judge shows it’s important for merging companies to pick an inheritor that has experience running a large number of stores.
When Kroger and Albertsons were attempting to merge, they and many experts pointed to the debacle of Albertsons overloading tiny Northwest grocer Haggen with divested store as part of its 2015 acquisition of Safeway. Now, the failed Kroger-Albertsons merger serves as a cautionary story all its own.
In case you missed it
Target acquires food distribution center in Colorado
To help expand its growing grocery business, Target recently paid $231 million to acquire a 96-acre food distribution center in Thornton, Colorado, according to The Minneapolis/St. Paul Business Journal.
Target used to rely on third-party distribution for its grocery business, but over the past decade or so, it has built a network of nine food distribution facilities across the nation, including three it opened in just the past two years, The Wall Street Journal reported.
Lunds & Byerlys to close urban store
On March 26, the Minnesota-based grocery chain will close a store in downtown St. Paul that it’s operated for the past 11 years, The Minnesota Star Tribune reported. In a statement, Lunds & Byerlys said it made the decision due to declining visits spurred by the pandemic-driven shift to remote work in recent years and because store security costs have risen recently.
Other grocers like Hy-Vee and PCC Community Markets have also struggled to operate downtown locations in recent years due to crime and the remote-work trend.
Danish grocer introduces symbol for European goods
Denmark’s largest grocer, the Salling Group, recently introduced a star symbol to its shelf labels that identifies products made in Europe, Fast Company reported. The move comes amid a backlash against U.S. goods spurred by President Donald Trump’s call to take over Greenland, the autonomous territory owned by Denmark.
Denmark is one of the leading countries in the “Boycott USA” movement, Axios wrote this week. A Danish Facebook page promoting the idea has 73,000 members
Impulse find
Popeyes’ sauce hits major grocery stores
The true measure of a fast food restaurant’s success isn’t how many locations it has or how many burgers or tacos it sells: it’s getting onto grocery store shelves.
Chick-fil-A, Arby’s and White Castle are among the chains that have launched consumer packaged goods over the years. Now, chicken chain Popeyes is joining their ranks, according to Allrecipes.com. On March 15, Popeyes’ Blackened Ranch and Sweet Heat dipping sauces will grace the aisles of Walmart, Kroger, Food Lion and other grocery chains.
In May, the restaurant chain’s Mardi Gras Mustard — “a creamy Creole mustard mixed with a bold, spicy horseradish,” per Allrecipes — will also be added to store shelves.
Bottled sauces are easier to put on shelves than the fried chicken and chicken sandwiches Popeyes is mainly known for. But hey, if White Castle can get its burgers into freezer aisles, maybe there’s a future for Popeyes’ proteins somewhere in the grocery store.
