Pavilions in WeHo will be sold off as Kroger, Albertsons merge

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Kroger Co. will sell off the Pavilions in West Hollywood along with 62 other supermarkets in California to gain approval for its merger with Albertsons Cos.

CEO Rodney McMullen informed employees through a memo that notifications are being sent to staff at the impacted locations. Employees, mostly based in Southern California, will become part of C&S Wholesale Grocers following the closure of the transaction. Until then, they will remain Kroger and Albertsons staff. McMullen assured that C&S has committed to maintaining existing pay, health plans, and collective bargaining agreements.

This announcement comes as the $25 billion Kroger-Albertsons merger, initially revealed in October 2022, approaches a critical trial in August. In response to a Federal Trade Commission (FTC) block, the companies increased their divestment offer from 413 to 579 locations, valued at $2.9 billion.

The divestment includes 124 stores in Washington, 101 in Arizona, and 91 in Colorado, with most California locations situated in the southern part of the state. It also encompasses a dairy plant in Colorado and six distribution centers across four states.

Kroger and Albertsons, which collectively operate nearly 5,000 stores under banners like Kroger, Ralphs, Harris Teeter, Albertsons, Safeway, Acme, and Jewel-Osco, argue the merger is vital to compete with larger non-unionized companies such as Amazon.com, Walmart, and Costco. They have promised to invest $500 million to lower prices, $1 billion to enhance employee wages and benefits, and $1.3 billion to upgrade Albertsons stores.

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The FTC contends that the merger would negatively impact consumers by reducing competition and service quality while giving the combined company more leverage over workers, potentially leading to slower wage growth and inferior benefits.

California union workers are also protesting, fearing job losses as a result of the divestiture.

The FTC has raised concerns that C&S may struggle to integrate the acquired stores and considers the divestiture plan insufficient. This skepticism is rooted in a previous situation from 2015 when the FTC approved Albertsons’ acquisition of Safeway after it sold 168 stores, predominantly to Washington state grocer Haggen Holdings LLC. Haggen later declared bankruptcy, and Albertsons repurchased many of the stores.

Among the stores to be sold to C&S are 12 Haggen locations in Washington. The Haggen brand, which entered the Southern California market nine years ago, acquired 146 stores from the Albertsons-Safeway deal but failed to succeed, leading to high prices and rapid closure within six months. Many of these properties remained vacant until recently being reoccupied by other chains such as Rivera Food Service, Gelson’s, and 99 Ranch Market.

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Brad
Brad
2 days ago

Were this deal to happen, C&S likely would rebrand its acquired California stores as “Albertsons”.

Kroger Co./Albertsons Cos. deal with C&S last fall said: “Agreement Includes Sale of the QFC, Mariano’s and Carrs Brand Names and the Exclusive Licensing Rights to the Albertsons Brand Name in Arizona, California, Colorado and Wyoming.”

https://www.sec.gov/edgar/search/#/q=%2522albertsons%2520brand%2522

WehoQueen
WehoQueen
2 days ago

Why haven’t any of the usual freeloaders proposed their standard line of “let’s tear it down, so we can make it a gigantic homeless shelter, as we can always use more freeloaders in our city”.

tsk tsk
tsk tsk
2 days ago
Reply to  WehoQueen

Sounds like youre the one that brought it up. freeloaders occupy your mind, dont they? takes one to know one.

hifi5000
hifi5000
3 days ago

If another market moves in with the same level of service (panache) and wide variety of groceries,there shouldn’t be a problem.West Hollywood and nearby Beverly Hills are fairly well-heeled,so any supermarket planner better heed the environment they are moving into.

They need to realize they are not moving into Pico Rivera.I hope the space will continue to be a supermarket.

KoWeho
KoWeho
3 days ago
Reply to  hifi5000

C&S brands are not high-end. I can’t see a Piggly Wiggly moving into a location between Weho and Beverly Hills. I see C & S selling some stores they bought to a third party, or maybe Whole Foods relocates, or Bristol Farms relocates from their current Weho stores.

Jonathan
Jonathan
3 days ago

Piggly Wiggly …!!! Im down to shop at the pig ..One of the C&S brands ..Check the midwest ads not bad …the key will be keepin the quality up but that seems to be across the board consistent at most markets as the suppliers are all selling the same goods basically. Even “Plain Wrap” or “Private Label” …So Chicken Littles lets do are homework before we get upset ..

Eric Daniel
Eric Daniel
4 days ago

Wow. I just saw the full list on usatoday. A lot of closures in the southern california area. Like the Burbank Vons (pass) and Pavilions stores, Studio city, beverly hills, and Sherman oaks too. They are selling these off to not have a monopoly. But there are are Ralphs in the area of these closures, so they are the ones that will benefit, since they are removing choice by closing.stores. I don’t know who is left to take over these closed spaces. I hope not more smart and final stores like the last merger.

Larry Block
3 days ago
Reply to  Eric Daniel

Prime space for a real estate developer depending if the land is owned or leased.

Mikie Friedman
Mikie Friedman
4 days ago

I have been shopping at that store for over 40 years…when it was Vons and Safeway before it was Pavilions! I hope and pray it doesn’t go out of business!

Morty
Morty
4 days ago

This is terrible news for West Hollywood. C&S is nick named “cheat & steal” by people in the grocery business. They do not operate any grocery stores in California and this will end up being a disaster for our Pavilion’s store. If politicians allow this merger to go ahead then Ralph’s, Vons, Albertson’s, Food 4 Less and most Pavilion’s stores will all be owned by Kroger. You can expect your groceries to dramatically increase in price. The federal government needs to stop this merger.

Larry Block
3 days ago
Reply to  Morty

dont count on any chain with no stores in california to open in the highest overall wage city in the state.

Morty
Morty
3 days ago
Reply to  Larry Block

C&S, Albertson’s & Kroger are all my customers. I know them all very well. Believe me, this will be a disaster for consumers. C&S does not have the infrastructure in CA to be successful and they are lousy merchants. Piggly Wiggly is their primary retail chain. Most of their business is from being a wholesale grocer not from being in the retail grocery business. If the FTC approves this merger it will be a colossal mistake. There is NOTHING in this merger for consumers.

Steve Martin
Steve Martin
4 days ago

Let’s hope the FTC blocks the merger. Buying less at Costco could save jobs and neighborhood businesses. I am sure a number of developers will be eyeing this site for a major development if a major chain market at this not location.

Morty
Morty
4 days ago
Reply to  Steve Martin

Here is how this will work. Kroger & Albertson’s will sell the West Hollywood location to C&S. C&S will then re-brand the store. Since they own just a few grocery stores in California I don’t know what they will name it. The store will most likely fail because C&S is a garbage company and then Kroger will buy it back cheap. It’s a scam by Kroger to have a monopoly in the grocery biz here in Southern Cal. This merger is one of the worst possible mergers for consumers.

Kevin
Kevin
3 days ago
Reply to  Steve Martin

The FTC did block it, but Kroger and Albertsons are suing. It is going to trial in August. If Trump wins, I would expect a reversal from his FTC.

Steve Martin
Steve Martin
3 days ago
Reply to  Kevin

Ugh! Given Trump’s dislike for California, I am sure you are right.

:dpb
:dpb
4 days ago

The information here is sad, but incomplete. What will be done with the store? I find it had to believe the actual store will fail to exist. More will be revealed.

Kevin
Kevin
4 days ago

C&S is a wholesale grocer, not a retail operator, so they would need to brand the stores. Giving up this flagship location shows how desperate Albertsons and Kroger are to make this deal happen. Too bad they won’t sell them to H E B from Texas. Great stores.

Morty
Morty
3 days ago
Reply to  Kevin

Kroger & Albertson’s would never sell their stores to a reputable company like HEB because they don’t want any real competition and HEB is a very well respected grocery chain. They picked C&S because they know C&S will probably fail and then they can buy back the stores on the cheap. If the merger goes through most Pavilions, Vons, Albertson’s, Ralph’s and Food 4 Less stores in CA will be controlled by Kroger.

greeneyedguy
greeneyedguy
4 days ago

Omg how could John Erickson do this!? Lets march to city hall with pitchforks! -Average Weho Online commenter

john
john
4 days ago
Reply to  greeneyedguy

Anyone on the far left, this is an example of what your people sound like.

JF1
JF1
4 days ago
Reply to  john

lol

BloodshotEyedGuy
BloodshotEyedGuy
4 days ago
Reply to  john

💯 percent true! 👍

Rich
Rich
2 days ago
Reply to  john

Yes! That, along with, “How could the Orange Devil do that to us poor Weho Victims?” Lol

Steve Martin
Steve Martin
4 days ago
Reply to  greeneyedguy

No, he is only responsible for the really stupid stuff like cutting the Sheriff’s and narrowing Fountain to one lane so we can have protected bike paths.

JF1
JF1
3 days ago
Reply to  Steve Martin

Lol

Rich
Rich
2 days ago
Reply to  Steve Martin

Exactly!!!

JF1
JF1
4 days ago

It will be sold off but will C&S license the Pavilions name and continue to operate it under that brand name?

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