Kroger to merge with Albertsons?

[marshd1000]

It looks like about 400 stores will go to C&S.

https://www.reuters.com/markets/deals/k ... 023-09-06/

[Romr123]

They have done at least some minimal trade dress/image updates to Grand Union to make it at least a reasonable slot-in for some of these sites.

[arizonaguy]

It looks like about 400 stores will go to C&S.

https://www.reuters.com/markets/deals/k ... 023-09-06/

And these 400 stores will all close within the next decade or be sold piecemeal to ethnic operators or small regional chains.

C&S has a horrible track record of operating stores long term.

[babs]

It looks like about 400 stores will go to C&S.

https://www.reuters.com/markets/deals/k ... 023-09-06/

And these 400 stores will all close within the next decade or be sold piecemeal to ethnic operators or small regional chains.

C&S has a horrible track record of operating stores long term.

The comeback of Piggly Wiggly to the Pacific Northwest?!?!

[retailfanmitchell019]

If the FTC were to have some cojones, they would ask C&S, “Do you plan to operate the stores in the long haul, at least 10 years, without selling the stores to another buyer or closing them?” The Feds should be asking that question to every potential buyer of Albertsons/Kroger divests, and mention the Haggen effect to potential buyers. Why do I say this? We don’t need a repeat of the Haggen disaster, which was Comvest Partners acting as Haggen to buy Albertsons/Safeway divests, using the stores as space fillers, before selling the stores for real estate. Haggen was never interested in operating stores outside WA/OR. Comvest was the one pulling the strings of its puppet, Haggen. I blame Comvest for the Haggen disaster, not Haggen itself. Unified Grocers, Haggen’s wholesaler, gave Haggen ZERO help. They were another reason for the Haggen disaster.

I just wonder if C&S will gain the rights to use a banner, such as Albertsons. Piggly Wiggly and Grand Union are unfamiliar names out West. It might work for divests around Chicago, where Piggly Wiggly has a minimal presence in the far north Chicago suburbs (near the Wisconsin border). I suspect C&S will farm out the stores to local operators (who I fear will fail with the stores, similar to Minyard in Dallas, and AFS affiliates with some of the divested Albertsons/Safeway stores in MT/WY).

Maybe C&S will back out of the deal at the last minute (like Albertsons’ rumored acquisition of Rainbow Foods/Baker’s from Fleming; Safeway’s rumored acquisition of Farmer Jack/Kohl’s from A&P; Safeway’s rumored acquisition of Kroger in 1998; Supervalu’s rumored acquisition of Dominick’s; and so on).

[ClownLoach]

If the FTC were to have some cojones, they would ask C&S, “Do you plan to operate the stores in the long haul, at least 10 years, without selling the stores to another buyer or closing them?” The Feds should be asking that question to every potential buyer of Albertsons/Kroger divests, and mention the Haggen effect to potential buyers. Why do I say this? We don’t need a repeat of the Haggen disaster, which was Comvest Partners acting as Haggen to buy Albertsons/Safeway divests, using the stores as space fillers, before selling the stores for real estate. Haggen was never interested in operating stores outside WA/OR. Comvest was the one pulling the strings of its puppet, Haggen. I blame Comvest for the Haggen disaster, not Haggen itself. Unified Grocers, Haggen’s wholesaler, gave Haggen ZERO help. They were another reason for the Haggen disaster.

I just wonder if C&S will gain the rights to use a banner, such as Albertsons. Piggly Wiggly and Grand Union are unfamiliar names out West. It might work for divests around Chicago, where Piggly Wiggly has a minimal presence in the far north Chicago suburbs (near the Wisconsin border). I suspect C&S will farm out the stores to local operators (who I fear will fail with the stores, similar to Minyard in Dallas, and AFS affiliates with some of the divested Albertsons/Safeway stores in MT/WY).

Maybe C&S will back out of the deal at the last minute (like Albertsons’ rumored acquisition of Rainbow Foods/Baker’s from Fleming; Safeway’s rumored acquisition of Farmer Jack/Kohl’s from A&P; Safeway’s rumored acquisition of Kroger in 1998; Supervalu’s rumored acquisition of Dominick’s; and so on).

It's got Haggen written all over it, plus the details seem to go back to what I had mentioned before - sale of both KR and ACI stores which could potentially drive concern amongst certain AGs and others as they obviously did work together on the list which may be considered collusion.

I just wonder how many of these stores would be considered closure candidates internally anyway... My favorite example of the Vons next to an Albertsons in Murrieta, looked into things and the Vons is less than a year away from it's 20 year anniversary. That is a guaranteed goner regardless of the merger as I'm sure the lease has an opportunity to exit at 20, but they'll gladly sell it off to create the false image of increasing competition in the market. I'll bet there's a lot of that kind of activity once we see a list of stores. These will all be problematic, dog locations - and if there's any store that does make anyone here gasp, it will probably turn out to be a location that they are worried about losing to redevelopment long term.

[marketreportblog]

Worth noting, too, that Mark McGowan (former president of Stop & Shop) was hired by C&S in 2021 as a senior vice president specifically in charge of their retail operations, a position they didn't previously have. It's hard to tell, but they might actually be getting serious about the retail side of their business. On the other hand, he could be tasked with essentially "flipping" the stores -- reestablishing them under their own brands, setting them up with the C&S program, and then selling them to other operators as theorized here. I visited two of the Grand Union stores in July and found them fine, but a bit on the rundown side. They were certainly nothing special. We'll see how they do with a larger chunk of stores like this, if the deal goes through.

https://www.supermarketnews.com/executi ... le-grocers

[ClownLoach]

If the FTC were to have some cojones, they would ask C&S, “Do you plan to operate the stores in the long haul, at least 10 years, without selling the stores to another buyer or closing them?” The Feds should be asking that question to every potential buyer of Albertsons/Kroger divests, and mention the Haggen effect to potential buyers. Why do I say this? We don’t need a repeat of the Haggen disaster, which was Comvest Partners acting as Haggen to buy Albertsons/Safeway divests, using the stores as space fillers, before selling the stores for real estate. Haggen was never interested in operating stores outside WA/OR. Comvest was the one pulling the strings of its puppet, Haggen. I blame Comvest for the Haggen disaster, not Haggen itself. Unified Grocers, Haggen’s wholesaler, gave Haggen ZERO help. They were another reason for the Haggen disaster.

I just wonder if C&S will gain the rights to use a banner, such as Albertsons. Piggly Wiggly and Grand Union are unfamiliar names out West. It might work for divests around Chicago, where Piggly Wiggly has a minimal presence in the far north Chicago suburbs (near the Wisconsin border). I suspect C&S will farm out the stores to local operators (who I fear will fail with the stores, similar to Minyard in Dallas, and AFS affiliates with some of the divested Albertsons/Safeway stores in MT/WY).

Maybe C&S will back out of the deal at the last minute (like Albertsons’ rumored acquisition of Rainbow Foods/Baker’s from Fleming; Safeway’s rumored acquisition of Farmer Jack/Kohl’s from A&P; Safeway’s rumored acquisition of Kroger in 1998; Supervalu’s rumored acquisition of Dominick’s; and so on).

If they give them any banner, it will be from something worthless like Randalls, or Shaws, or another failing division. It's clear that Kroger is shifting their advertising to "The Kroger Family of Stores" especially online and will keep every banner because of their trade value. The past has proven the financial impact of disruption caused by a name change. And why give up a name when you want these stores to fail? The best thing that can happen is for the random Vons to become some brand nobody's ever heard of out West, so that store becomes a pariah in the community and all of its business goes elsewhere (most likely to the nearest Kroger owned stores).

All this is going to amount to is a clever way of getting paid for stores that Kroger would want to close after the merger. I expect that there's probably another buyer being lined up for the rest of the overlaps in SoCal, Nevada, and Arizona - probably Save Mart as has been speculated for a long time. The message that some "some" California stores will go to C&S makes it sound like very few units, and probably just the Food4Less chain or the previously unaddressed Safeway-Albertsons merger overlaps where they should have consolidated stores right next to each other but needed to keep the assets on the books due to their state of indebtedness. Those problem stores that ACI has been intentionally operating as third class markets like that Murrieta one I love to complain about are perfect for a C&S type takeover then operations farm out. Could possibly include some of those seemingly unwanted Ralphs operations like San Luis Obispo county; if they could get C&S set up to supply then find a local operator like California Fresh Market (aka El Rancho Solvang) I'm sure they could become viable stores. But I do not think the core "merger overlaps" in SoCal especially are going to C&S in this deal since they emphasized PNW and Mountain areas as the primary store bases (Haggen? Most of QFC? Lots of rural Albertsons, Safeway, Smiths?)

I had speculated that Save Mart might be tightening up expenses due to interest rate pains, but they also could be deliberately pinching every penny needed to maximize available funding for a deal. I think it's very interesting that Apollo isn't funding C&S, maybe they don't want to be seen as an octopus with tentacles in every part of the deal, so I would guess they would back Save Mart in expanding to SoCal, Arizona, Nevada and New Mexico as they're more likely to gain viable and valuable assets especially in SoCal. Don't forget that Apollo retail division is based in Los Angeles so they're probably much more comfortable here. They could also merge Cardenas into Save Mart at the same time, or if C&S doesn't take F4L then same thing and convert F4L to the Cardenas banner as part of the deal since Kroger has been trying to operate it more as a Hispanic format than a Price Impact in SoCal lately.

[SamSpade]

Wow, C&S (in theory) offers a lot of options to its member stores:
https://www.cswg.com/services/store-des ... gineering/ (a lot more than just store layout & design)

Off Topic

Also, it's not really talked about much, but remember they opened a "state of the art" warehouse in 2020 in the Portland, Ore. market, which can definitely service Oregon, Washington, and probably parts of Idaho or northern California if needed.
https://www.cswg.com/about/locations/troutdale-ore/

Last I knew, C&S was also providing some fresh grocery to Target. A friend that is a truck driver works for a 3rd party they were contracting with for a time during the pandemic workforce shortage. Perhaps that has passed enough now they feel they can expand.

[ClownLoach]

Wow, C&S (in theory) offers a lot of options to its member stores:
https://www.cswg.com/services/store-des ... gineering/ (a lot more than just store layout & design)

Off Topic

Also, it's not really talked about much, but remember they opened a "state of the art" warehouse in 2020 in the Portland, Ore. market, which can definitely service Oregon, Washington, and probably parts of Idaho or northern California if needed.
https://www.cswg.com/about/locations/troutdale-ore/

Last I knew, C&S was also providing some fresh grocery to Target. A friend that is a truck driver works for a 3rd party they were contracting with for a time during the pandemic workforce shortage. Perhaps that has passed enough now they feel they can expand.

I do believe C&S is indeed a key vendor for Target, especially the SuperTarget locations. Judging by the noticeable improvements in the concept at higher volume units, they seem to be capable of delivering mostly good product. Still some oddball sourcing issues like Canadian tomatoes in Riverside County which is around the corner from some of the largest tomato farms in the country.