C&S supplies a lot of grocery products to Target. That in itself gives it a decent foundation.babs wrote: ↑December 4th, 2023, 12:57 pmThe larger issue is that in many areas, C and S is not a competitive chain. 4 stores in Utah, 66 stores in California, 26 stores in Texas, 2 in Louisiana, 2 in Montana...in these areas, this is not a viable chain unless they commit to opening more stores.storewanderer wrote: ↑December 4th, 2023, 12:48 am C&S appears to be a lot stronger financially than Fred's was though... but we don't really know because they are privately held.
I think they are going to have a hard time saying C&S is not in good enough financial condition to complete this transaction. This is a screaming bargain for C&S.
They need to bar Kroger from buying any of these stores back and building any new stores within x miles of the divested stores for a 10 year period. They did something like this with Albertsons/ASC merger in 1999. A state like California should take the lead here and start to make this kind of demand.
C&S was selected as the buyer for a reason and I think Kroger knows what they are doing. I am confident it is the Kroger side that pushed C&S as a buyer out of nowhere rather than the Save Mart operation run by an investment group that is former Cerberus people and with a bunch of veteran Albertsons LLC people in upper management that is clearly very well connected.
They organically expanded into OR/WA a few years ago. It is my understanding they supply some kind of school lunch programs or other institutional customers in that territory, in addition to supplying Target. They haven't picked up many customers yet but they've picked up a few. Sid's IGA out in Long Beach, WA and the related ShopNKart operator out in Ocean Shores, WA are a couple stores C&S picked up (previous Supervalu customers).
I don't think C&S is a good buyer for these stores as they aren't a great wholesaler when it comes to supporting independents (perimeter, ad program, in store marketing materials, etc. are terrible or non-existent or they say to go see IGA) and have a very weak private label in Best Yet, but I do think C&S is a company that is stable financially and in business for the long haul.