It’s been two years since Kroger and Albertsons Cos. proposed what would be the largest supermarket merger in history – $24.6 billion, to be exact. And while the grocery giants may be closer to a final decision on the deal, it could be a while longer before it happens — if it happens.
Kroger says the merger is essential to remain competitive with the likes of Walmart, Costco and Amazon. The merger proposal includes divesting 579 Kroger and Albertsons grocery stores to a third party — including more than two dozen Albertsons, Tom Thumbs and Market Streets in North Texas. The companies have promised that no jobs would be lost.
Kroger and Albertsons have a total of roughly 5,000 stores under numerous brands, or “banners,” including Tom Thumb, Ralphs, Harris Teeter, Fred Meyer, King Soopers, Safeway and Vons.
“Kroger joining with Albertsons will mean $1 billion in lower prices at Albertsons’ stores to help customers fight inflation, increased choices for more customers in more communities, higher wages and industry-leading benefits for associates, and a strong unionized workforce that will support long-term job security,” says a Kroger spokesperson .
But not everyone thinks the merger would benefit consumers, including federal regulators and state attorneys general.
Here is where things stand as of now, and how the potential merger would affect North Texas grocery shoppers.
How close is the Kroger-Albertsons merger to approval?
That’s a little difficult to say, because there are multiple lawsuits pending.
The Federal Trade Commission, along with eight states and the District of Columbia, have sought to block the merger through a federal antitrust case, which wrapped up in September in Oregon. U.S. District Judge Adrienne Nelson is deliberating on a decision. Meanwhile, two other states — Washington and Colorado — are also suing to block the deal. The main arguments are that the merger would create a monopoly that ultimately hurts consumers and workers.
The federal judge’s decision in Oregon won’t necessarily be the end of it. If she rules in favor of the FTC, the case will move to Washington D.C. to decide the fate of the deal, reported Seattle public radio station KUOW .
Why did the FTC sue to block the Kroger-Albertsons merger?
The FTC filed the antitrust lawsuit because regulators believe the deal would “eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans,” according to the FTC’s announcement in February .
The FTC also alleges the merger would “erase aggressive competition for workers.” Competition can lead to higher wages, better benefits and improved working conditions.
A key issue is the definition of a grocery store.
Kroger’s website describing the merger’s benefits makes the argument that competition is not limited to traditional supermarkets. Kroger and Albertsons have to consider a broad range of competition from supercenters, clubs, discount stores and online marketplaces, they say.
Their main competition in 2023 was Walmart/Sam’s Club, Costco and Aldi. However, they are also accounting for Dollar Tree, Amazon and Target.
The FTC claims that a grocery market is a “ one stop shop for groceries .”
The FTC does not consider wholesale membership stores like Costco and Sam’s Club as grocers. Same for Whole Foods and Aldi, since they do not carry a wide variety of brands. Though Dollar Stores were Kroger’s fourth fiercest competition, they are also not considered grocers by the FTC.
The state attorneys general who joined the FTC lawsuit to block the merger represent Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming, plus D.C.
What’s in store for Kroger & Albertsons in North Texas?
As part of the proposed merger, 579 Kroger and Albertsons stores across the country would be sold to New Hampshire-based C&S Wholesale Grocers for $2.9 billion. Among the stores on the divestiture list, 28 are in Texas — most of them in the Metroplex. All of the Texas stores that would be sold are Albertsons banners.
Ohio-based Kroger has more than 200 stores in Texas, clustered in the Metroplex and the Houston area. Kroger employs more than 30,000 workers in Texas. Idaho-based Albertsons has more than 40 stores in Texas, as well as 65 Tom Thumbs.
These are the 28 Texas stores that would be sold to C&S Wholesale Grocers:
Market Street — 985 W. Bethany Drive, Allen
Albertsons — 6220 U.S. 287, Arlington
Albertsons — 301 S.W. Plaza Shopping Center, Arlington
Tom Thumb — 1701 W. Randol Mill Road, Arlington
Tom Thumb — 2755 N. Collins St., Arlington
Tom Thumb — 6333 E. Mockingbird Lane, Dallas
Albertsons — 2321 W. University Drive, Denton
Albertsons — 1155 N. Main St., Euless
Market Street — 3800 Long Prairie Road, Flower Mound
Tom Thumb — 4301 Cross Timbers Road, Flower Mound
Market Street — 11999 Dallas Parkway, Frisco
Market Street — 4268 Legacy Drive, Frisco
Tom Thumb — 4848 Preston Road, Frisco
Tom Thumb — 5550 FM 423, Frisco
Randalls — 2931 Central City Blvd., Galveston
Randalls — 14610 Memorial Drive, Houston
Tom Thumb — 612 Grapevine Highway, Hurst
Tom Thumb — 1000 Keller Parkway, Keller
Market Street — 3145 E. Broad St., Mansfield
Market Street — 6100 W. Eldorado Parkway, McKinney
Tom Thumb — 6800 W Virginia Parkway, McKinney
Tom Thumb — 1501 Pioneer Road, Mesquite
Tom Thumb — 3945 Legacy Drive, Plano
Tom Thumb — 1380 W. Campbell Road, Richardson
Tom Thumb — 3070 N. Goliad, Rockwall
Tom Thumb — 551 Laurence Drive, Rockwall
Albertsons — 1201 N. Saginaw Blvd., Saginaw
Tom Thumb — 101 Trophy Lake Drive, Trophy Club
The FTC argues that the Kroger-Albertsons divestiture proposal is “inadequate” and the list is a “hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together.”
Further, the FTC said the proposed divestitures are not a standalone business, and C&S would “face significant obstacles stitching together the various parts and pieces from Kroger and Albertsons into a functioning business.”
What will happen to Tom Thumb, Albertsons sold in the merger?
According to Kroger’s divestiture plan, the stores sold to C&S will “continue operating as they do today.”
“ 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.”
In other states, Kroger will keep the Albertsons and Safeway banners. So in Texas, the 28 stores sold to C&S will most likely retain their same banners. Meaning, we will still see the Tom Thumb, Albertsons, Market Street and Randalls names.
What will change if the merger is approved?
What we do know is that Kroger vows to lower prices, like it has done after previous mergers, and invest in updates to certain stores.
In 2014, Kroger invested $2.5 million during its merger with Harris Teeter , and $2.4 million in a 2016 deal with Roundy’s stores. If the Albertsons merger is approved, Kroger says it will invest $1.3 million to improve Albertsons stores.
Kroger also vows to not close any Albertsons stores, distribution centers, or manufacturing facilities. This also means they will not lay off any “frontline associates,” according to Kroger’s divestiture plan.
Assuming that banner names remain in place in Texas, brand appearances in shopping aisles should be kept intact.
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