Dive Brief:

• Kroger and Albertsons have publicly divulged the list of exact locations of stores, distribution centers and a plant they intend to divest to C&S Wholesale Grocers.
• The list shows that the grocers are looking to divest nearly 600 stores across 18 states and Washington, D.C., along with six distribution centers and one plant, to C&S. 
• The release of the list comes about six weeks before a crucial court hearing regarding the grocers’ proposed merger is set to begin.

Dive Insight:

Kroger and Albertsons have positioned their intention to part ways with stores as a key reason their proposed merger should not be deemed a threat to competition since first announcing the megadeal in 2022, but opponents of the deal have taken a dim view of the divestiture proposal from the start.

The Federal Trade Commission, which is seeking a court order to derail the merger on antitrust grounds, in February dismissed the companies’ original arrangement to sell 413 stores and other assets to C&S as “far short of mitigating the lost competition.” Kroger and Albertsons responded in April with a revised plan to sell 579 stores along with a richer mix of non-store assets, although they did not publicly reveal which locations they have marked for divestiture until Tuesday.

The supermarkets Kroger and Albertsons plan to sell fall under more than a dozen banners and are located in 18 states and Washington, D.C. The list encompasses more than 280 Safeway stores and 99 Albertsons locations as well as numerous stores under banners including QFC, Vons, Carrs, Pavilions and Tom Thumb.

The FTC and other critics have asserted that C&S is not strong enough to operate a competitive grocery chain, sparking strong responses from Kroger and Albertsons. A federal judge in Oregon is scheduled to begin a hearing on Aug. 26 to consider a request by the FTC for a temporary restraining order to block the merger.

The FTC is “ignoring that C&S is a large, sophisticated, and well-financed company with deep grocery industry experience, and is well-positioned to successfully operate the significant assets that it will receive as part of any divestiture package and execute on its business plans,” Albertsons said in a March legal filing with the agency.

The companies also face suits aimed at halting their merger filed by the attorneys general of states including Colorado and Washington.

Kroger on Tuesday reiterated its stance that the divestiture proposal is sound.

“C&S’s strong operational focus coupled with its experienced management team and financial resources will position it to successfully operate divested stores for years to come,” a Kroger spokesperson said in an emailed statement.

The spokesperson also underscored Kroger and Albertsons’ previously stated commitment to not close stores or lay off associates as a result of the merger.

In a joint statement issued after the list was released, several United Food and Commercial Workers Union locals said they remain opposed to the merger plan.

“Today’s announcement changes nothing. The merger is not a done deal, far from it. We remain focused on stopping the proposed mega-merger for the same reasons we have stated since it was first announced over 20 months ago — because we know it would harm workers, it would harm shoppers, it would harm suppliers and communities, and it is illegal,” the labor groups said.