Albertsons brand would no longer exist in Colorado after merger with Kroger
Most Albertsons-owned stores, branded as Safeway, will be sold to C&S while King Soopers parent, Kroger, picks up just 14. Week two in Colorado antitrust trial begins.
As week two of the State of Colorado v. Kroger trial begins Tuesday (Monday is a state holiday), last week’s testimony gave onlookers a peek behind the corporate grocery curtain in Colorado.
If the merger moves forward, Albertsons would no longer exist in Colorado, as it hands most of its local stores, which include mostly Safeways, to a little-known grocer and food distributor called C&S Wholesale Grocers in New Hampshire. Lawyers with the state Attorney General’s Office questioned whether the small company with a spotty history managing acquisitions can handle the $2.9 billion divestiture. But C&S, whose chairman also cofounded Symbotic, a warehouse robotics company, has big plans to invest in the stores, lower prices and grow overnight from about two dozen supermarkets to more than 600.
“This notion that one would buy for $2.9 billion based on money borrowed from banks to a large extent and invest another $1.2 billion (and then) sell it for (less) would be a Harvard Business School case study in how to not run a business,” said C&S attorney Steven L. Holley. “C&S is buying these stores because it wants to run them.”
Kroger, which owns about 150 King Soopers and City Market grocery stores statewide, will scoop up 14 Albertsons stores (all Safeways) in Colorado and lower their prices. That’s part of an additional billion-dollar investment Kroger committed to nationwide. A spokesperson said in Colorado, there will be a $40 million investment reserved for the 14 new stores.
As Kroger officials said in court, lowering prices at Safeway or Albertsons locations won’t be much of a challenge because Kroger’s prices are already “10 to 12% lower than Albertsons,” said Matthew M. Wolf, Kroger’s lead attorney, in his opening statement.
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