🛒 Kroger-Albertsons Merger: National Impact

[ClownLoach]

Why would Kroger sneak these into the divestitures?

DC/MD/VA/DE: 9 Harris Teeter stores

[storewanderer]

Are they even serious about this anymore?

They are now proposing to divest FEWER stores in CA than they previously were. However they will now be divesting ALL Albertsons/Vons/Safeway/Pavilions in CA. Previously it said they'd be divesting some Ralphs/F4L/FCO Stores. Interesting change there.

They are also proposing to divest three FEWER stores each in ID/NM. I wonder why this is. The issue with fewer stores is it makes C&S even less viable in those places than it would already be.

They are basically divesting all of Albertsons/Safeway in CO/AZ now... total store count is at 135 in AZ and 105 in CO.

IL is also interesting. Previously it was divesting "14 Kroger Stores" and now it is 35 "Albertsons and Kroger Stores." I wonder what 21 Jewel stores got added to the divest list. They may be trying to clear Jewel from outside Chicago which may not be the worst idea as it is weaker and weaker outside Chicago.

"License" the Albertsons name to C&S in WY (like 5 stores getting divested there) and CA (now 63 stores getting divested there)?
"License" the Safeway name in CO and AZ? Two of the weakest markets for Safeway... sure, license that name there. But don't license it in OR/WA where like 150 stores under the Safeway name are getting divested? Kroger is REALLY smart to offer this up of the Safeway name in CO and AZ which are the markets where Safeway has the worst reputation.


Old list:

WA: 104 Albertsons Cos. and Kroger stores
CA: 66 Albertsons Cos. and Kroger stores
CO: 52 Albertsons Cos. stores
OR: 49 Albertsons Cos. and Kroger stores
TX/LA: 28 Albertsons Cos. stores
AZ: 24 Albertsons Cos. stores
NV: 15 Albertsons Cos. stores
IL: 14 Kroger stores
AK: 14 Albertsons Cos. stores
ID: 13 Albertsons Cos. stores
NM: 12 Albertsons Cos. stores
MT/UT/WY: 12 Albertsons Cos. stores
DC/MD/VA: 10 Harris Teeter stores

New list:
WA: 124 Albertsons Cos. and Kroger stores
CA: 63 Albertsons Cos. stores
CO: 91 Albertsons Cos. stores
OR: 62 Albertsons Cos. and Kroger stores
TX/LA: 30 Albertsons Cos. stores
AZ: 101 Albertsons Cos. stores
NV: 16 Albertsons Cos. stores
IL: 35 Albertsons Cos. and Kroger stores
AK: 18 Albertsons Cos. stores
ID: 10 Albertsons Cos. stores
NM: 9 Albertsons Cos. stores
MT/UT/WY: 11 Albertsons Cos. stores
DC/MD/VA/DE: 9 Harris Teeter stores

Also what does "Access" to Signature and O Organics brands mean? I heard something about this before but never could find anything official about it. HCal seemed to think it was not something that made any sense as it would have Kroger acting as a wholesaler. But what does "access" mean? Would they have to buy the stuff from Kroger? Or could they go to their Best Yet supplier and tell them to run the stuff in Signature packaging? Kroger should just divest those labels to C&S entirely. Maybe C&S cannot afford to pay whatever those labels would cost? So this "access" thing is a way to make it look like they're doing something...

I think many issues are starting to come up with the buyer C&S.

So as this goes basically this C&S is going to have to rebrand about 320 stores from what I can tell. They won't have to rebrand about 50 WA Stores, 20 CA Stores (since I expect about that many of the divests to be Albertsons), 80 AZ Stores, 18 Alaska Stores, or 90 CO Stores.

Add the Safeway name rights in OR/WA to C&S and they would only have to rebrand about 180 stores.

I am not sure C&S can even afford to rebrand stores. I think they need to work this deal so C&S has to rebrand as few stores as possible. Rebranding is also the most disruptive to the stores.

I am really curious why CA has 3 fewer divests, ID has 3 fewer divests, NM has 3 fewer divests, MT/UT/WY has 1 fewer divest, and Harris Teeter has 1 fewer divest, than the original list. How does that happen? Are some stores about to be closed? Can C&S not afford these 11 random stores for some reason? What changed?

[jamcool]

Safeway is putting money in Phoenix…. Remodeled stores and several new stores in Surprise and one planned in Buckeye. I prefer going to Safeway as the Fry’s stores seem to be getting more shabbier, especially the floors.

[storewanderer]

Safeway is putting money in Phoenix…. Remodeled stores and several new stores in Surprise and one planned in Buckeye. I prefer going to Safeway as the Fry’s stores seem to be getting more shabbier, especially the floors.

Then it should be a great thing for this C&S? They're getting better looking stores (I don't deny this...)...

I wasn't impressed with Frys or Safeway/Albertsons on the last trip to Phoenix. I'd avoid both other than for ad promotions. Maybe a little bit of center store at Frys. I saw like 2-3 Frys on far perimeter edges of Phoenix suburbs with what I'd call properly maintained perimeters.

[a42887]

Under the amended agreement, C&S will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado. In these states, Kroger will re-banner the retained Albertsons and Safeway bannered stores following the closing of the merger. Kroger will maintain the Albertsons and Safeway banners in the remaining states.

We’re seriously doing this BS again?

I worked for SuperValu in Wyoming back in the dark days with Sv an LLC splitting the name. That was hell explaining why the stores across the border in Colorado had different owners and ads than we did. And now it’s come full circle again.

[wnetmacman]

I worked for SuperValu in Wyoming back in the dark days with Sv an LLC splitting the name. That was hell explaining why the stores across the border in Colorado had different owners and ads than we did. And now it’s come full circle again.

I think the intention here is for the combined company to run one or two banners in CO, which will be what Kroger already operates - King Soopers and City Market. They may not have much interest in Albertsons' outliers, because as many have said here, neither does particularly well in CO.

Safeway did this in the 80's when they spun Houston to Apple Tree - it only lasted a year before the rebranding.

[storewanderer]

Under the amended agreement, C&S will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado. In these states, Kroger will re-banner the retained Albertsons and Safeway bannered stores following the closing of the merger. Kroger will maintain the Albertsons and Safeway banners in the remaining states.

We’re seriously doing this BS again?

I worked for SuperValu in Wyoming back in the dark days with Sv an LLC splitting the name. That was hell explaining why the stores across the border in Colorado had different owners and ads than we did. And now it’s come full circle again.

You're raising another really good point here.

Banner sharing in surrounding states does not make sense. CO/WY you will have a C&S Safeway an hour or less away from a C&S Albertsons. And then a Kroger Safeway in WY. It doesn't make any sense.

Kroger has ample banners to use in CO/WY with King Soopers, City Market, and Smiths. Kroger needs to divest fully the use of the banners Safeway AND Albertsons in CO/WY to whoever buys the divested stores. Period.

Also this seems to imply Kroger will keep use of the Albertsons banner in AZ, but not the Safeway banner. What is the point? Are they really going to want to use that banner in AZ? They have a very strong banner in Frys (and Smiths).

Nevada/New Mexico is another problem. C&S gets no banner there. I assume they will use QFC. So C&S will run QFC in Las Vegas, Safeway in Phoenix, and Albertsons in Los Angeles? QFC in New Mexico? Really? What a mess. And so confusing for the customer.

This is a joke and C&S needs a real banner to rebrand all stores to. At this point I think they should sell C&S the Safeway banner in all markets since it appears the majority of divested stores have that banner. Kroger can run a carve out Safeway operation in NorCal and DC/MD/VA since those are the only markets where there is little to no Safeway divesting occurring, If that QFC brand is so great (it isn't) Kroger can keep it and rebrand whatever few Safeways they keep in OR/WA to the QFC brand.

I also think a lack of a banner change and keeping the Safeway banner may help customers "not notice" the stores are under new ownership of C&S. Another key is not closing for 3 days to do a "conversion." If there is no banner change and they keep using the Safeway systems etc., they would not need to do that. Maybe close overnight for some IT conversions but they could do those over time. Also even better if they are able to keep the Signature and O Organics brands. But the second a banner change occurs and a storewide "clearance sale" of numerous items occurs, suddenly the lousy pricing, iffy perimeters, and whatever other localized issues the Safeway Stores have will all be noticed...

Also what about the loyalty program? The Safeway loyalty program needs to transition with no customer friction to these C&S Safeway units. I see nothing about how that occurs in the release. Kroger has done loyalty conversions many times in their own stores particularly with Ralphs and Smiths who used a different barcode sequence/barcode size for "old" cards (started with 2xxxxxx instead of 4xxxxxx). They keep the old loyalty and new loyalty "live" for a time. They do a thing where the system temporarily recognizes "old" and "new" cards and then do a "card link" scan during a transaction and instruct the customer to dispose/destroy their old card.

[ClownLoach]

Are they even serious about this anymore?

They are now proposing to divest FEWER stores in CA than they previously were. However they will now be divesting ALL Albertsons/Vons/Safeway/Pavilions in CA. Previously it said they'd be divesting some Ralphs/F4L/FCO Stores. Interesting change there.

They are also proposing to divest three FEWER stores each in ID/NM. I wonder why this is. The issue with fewer stores is it makes C&S even less viable in those places than it would already be.

They are basically divesting all of Albertsons/Safeway in CO/AZ now... total store count is at 135 in AZ and 105 in CO.

IL is also interesting. Previously it was divesting "14 Kroger Stores" and now it is 35 "Albertsons and Kroger Stores." I wonder what 21 Jewel stores got added to the divest list. They may be trying to clear Jewel from outside Chicago which may not be the worst idea as it is weaker and weaker outside Chicago.

"License" the Albertsons name to C&S in WY (like 5 stores getting divested there) and CA (now 63 stores getting divested there)?
"License" the Safeway name in CO and AZ? Two of the weakest markets for Safeway... sure, license that name there. But don't license it in OR/WA where like 150 stores under the Safeway name are getting divested? Kroger is REALLY smart to offer this up of the Safeway name in CO and AZ which are the markets where Safeway has the worst reputation.


Old list:

WA: 104 Albertsons Cos. and Kroger stores
CA: 66 Albertsons Cos. and Kroger stores
CO: 52 Albertsons Cos. stores
OR: 49 Albertsons Cos. and Kroger stores
TX/LA: 28 Albertsons Cos. stores
AZ: 24 Albertsons Cos. stores
NV: 15 Albertsons Cos. stores
IL: 14 Kroger stores
AK: 14 Albertsons Cos. stores
ID: 13 Albertsons Cos. stores
NM: 12 Albertsons Cos. stores
MT/UT/WY: 12 Albertsons Cos. stores
DC/MD/VA: 10 Harris Teeter stores

New list:
WA: 124 Albertsons Cos. and Kroger stores
CA: 63 Albertsons Cos. stores
CO: 91 Albertsons Cos. stores
OR: 62 Albertsons Cos. and Kroger stores
TX/LA: 30 Albertsons Cos. stores
AZ: 101 Albertsons Cos. stores
NV: 16 Albertsons Cos. stores
IL: 35 Albertsons Cos. and Kroger stores
AK: 18 Albertsons Cos. stores
ID: 10 Albertsons Cos. stores
NM: 9 Albertsons Cos. stores
MT/UT/WY: 11 Albertsons Cos. stores
DC/MD/VA/DE: 9 Harris Teeter stores

Also what does "Access" to Signature and O Organics brands mean? I heard something about this before but never could find anything official about it. HCal seemed to think it was not something that made any sense as it would have Kroger acting as a wholesaler. But what does "access" mean? Would they have to buy the stuff from Kroger? Or could they go to their Best Yet supplier and tell them to run the stuff in Signature packaging? Kroger should just divest those labels to C&S entirely. Maybe C&S cannot afford to pay whatever those labels would cost? So this "access" thing is a way to make it look like they're doing something...

I think many issues are starting to come up with the buyer C&S.

So as this goes basically this C&S is going to have to rebrand about 320 stores from what I can tell. They won't have to rebrand about 50 WA Stores, 20 CA Stores (since I expect about that many of the divests to be Albertsons), 80 AZ Stores, 18 Alaska Stores, or 90 CO Stores.

Add the Safeway name rights in OR/WA to C&S and they would only have to rebrand about 180 stores.

I am not sure C&S can even afford to rebrand stores. I think they need to work this deal so C&S has to rebrand as few stores as possible. Rebranding is also the most disruptive to the stores.

I am really curious why CA has 3 fewer divests, ID has 3 fewer divests, NM has 3 fewer divests, MT/UT/WY has 1 fewer divest, and Harris Teeter has 1 fewer divest, than the original list. How does that happen? Are some stores about to be closed? Can C&S not afford these 11 random stores for some reason? What changed?

I wonder if they're making changes to the store banner mix to make it easier for C&S? So for example in California make it mostly Albertsons branded stores that go to C&S if they were choosing between unloading a Ralphs or a Vons or an Albertsons in a particular neighborhood? Obviously they've decided the Albertsons name is more popular in Arizona than Safeway? That's odd too. I'm not even sure if this list is at all accurate, as I find it hard to believe that they would remove any store from the original list and replace it with another on the second list.

The Kroger press release doesn't even have the rigorous fight language of their previous PR, it just says they're going to go through the process to try to help the merger go through so that we all see the "benefits" of it. This is the minimum amount of effort to perform due diligence in attempting to combat the lawsuits etc. And I have to think this ends with the merger being stopped by an injunction, Kroger stating there is no path forward, Kroger refusing to pay the break up fee, and Kroger vs Albertsons lawsuits flying over the break up fee.

Also what the hell in Arizona... Going from a few dozen stores to a hundred? Even more obvious that they waited this out and made a divest plan that would allow them to add later in the states that made the most noise/lawsuits. Arizona probably was a surprise to them based on the amount of noise there? If California decided to raise a fuss now they would not have enough room to add another large batch of divestitures before hitting the deal cap.

All of this looks poorly put together, is too complicated with all the brand changes and such, and doesn't solve the fundamental issue that C&S is not an acceptable buyer.

I think the #1 reason for this entire exercise is PR, the overwhelming public perception is that the merger is dead and they decided to quickly get some news together and remind shareholders "HEY! We aren't done yet!" and that's about it.

[storewanderer]

I wonder if they're making changes to the store banner mix to make it easier for C&S? So for example in California make it mostly Albertsons branded stores that go to C&S if they were choosing between unloading a Ralphs or a Vons or an Albertsons in a particular neighborhood? Obviously they've decided the Albertsons name is more popular in Arizona than Safeway? That's odd too. I'm not even sure if this list is at all accurate, as I find it hard to believe that they would remove any store from the original list and replace it with another on the second list.

The Kroger press release doesn't even have the rigorous fight language of their previous PR, it just says they're going to go through the process to try to help the merger go through so that we all see the "benefits" of it. This is the minimum amount of effort to perform due diligence in attempting to combat the lawsuits etc. And I have to think this ends with the merger being stopped by an injunction, Kroger stating there is no path forward, Kroger refusing to pay the break up fee, and Kroger vs Albertsons lawsuits flying over the break up fee.

I think the #1 reason for this entire exercise is PR, the overwhelming public perception is that the merger is dead and they decided to quickly get some news together and remind shareholders "HEY! We aren't done yet!" and that's about it.

That "new list" came directly from the Kroger website so I think it is accurate?

I think their bluff is being called on the idea that converting a bunch of Safeway units in AZ/CO to the Albertsons banner makes any sense. So they throw C&S a bone there and let them use the Safeway name and also not go through the cost of banner changes.

I think Kroger knows this merger is in question at the corporate level. They have picked up remodels and new stores again during 2024 in various markets with overlap and basically said from a capex perspective they are operating as if no merger is occurring.

Albertsons on the other hand I am not quite sure. What I think internally and at the division level and lower is the Albertsons people are working as if the merger isn't happening and continuing to push stronger operations and competitive promotions to try to compete more effectively against Kroger. But at the corporate level I am not sure where Albertsons is it on the merger, it feels like their corporate level is just "watching the store" waiting for the merger to close.

[arizonaguy]

I wonder if they're making changes to the store banner mix to make it easier for C&S? So for example in California make it mostly Albertsons branded stores that go to C&S if they were choosing between unloading a Ralphs or a Vons or an Albertsons in a particular neighborhood? Obviously they've decided the Albertsons name is more popular in Arizona than Safeway? That's odd too. I'm not even sure if this list is at all accurate, as I find it hard to believe that they would remove any store from the original list and replace it with another on the second list.

The Kroger press release doesn't even have the rigorous fight language of their previous PR, it just says they're going to go through the process to try to help the merger go through so that we all see the "benefits" of it. This is the minimum amount of effort to perform due diligence in attempting to combat the lawsuits etc. And I have to think this ends with the merger being stopped by an injunction, Kroger stating there is no path forward, Kroger refusing to pay the break up fee, and Kroger vs Albertsons lawsuits flying over the break up fee.

I think the #1 reason for this entire exercise is PR, the overwhelming public perception is that the merger is dead and they decided to quickly get some news together and remind shareholders "HEY! We aren't done yet!" and that's about it.

That "new list" came directly from the Kroger website so I think it is accurate?

I think their bluff is being called on the idea that converting a bunch of Safeway units in AZ/CO to the Albertsons banner makes any sense. So they throw C&S a bone there and let them use the Safeway name and also not go through the cost of banner changes.

I think Kroger knows this merger is in question at the corporate level. They have picked up remodels and new stores again during 2024 in various markets with overlap and basically said from a capex perspective they are operating as if no merger is occurring.

Albertsons on the other hand I am not quite sure. What I think internally and at the division level and lower is the Albertsons people are working as if the merger isn't happening and continuing to push stronger operations and competitive promotions to try to compete more effectively against Kroger. But at the corporate level I am not sure where Albertsons is it on the merger, it feels like their corporate level is just "watching the store" waiting for the merger to close.

Kroger has spent next to no CapEx on any existing store in Arizona since the merger was announced.

I believe they have 1 - 2 new stores in the pipeline but their existing stores are continuing to deteriorate.

Meanwhile Safeway has some absolutely beautiful looking stores.

Currently there are 105 Safeway stores and 30 Albertsons stores in Arizona. I'm assuming virtually all of the Safeway stores will be going to C&S and that Kroger will keep 4 Safeway stores and all 30 Albertsons units and rebrand them to Fry's or close them (the Albertsons banner is non-union so probably easier for Kroger to close). I wouldn't be surprised if many of the Albertsons units end up going to Bashas' as they would be improvements over Bashas' also junky store base.

At least with most of the stores going to C&S I can avoid the junky, smelly, disgusting Fry's stores.