UPDATE 7/27/2024: The merger between Albertsons and Kroger has been put on hold, delaying the sale of nearly 600 stores, including the Pavilions in West Hollywood along with 62 other stores in California. A Colorado judge issued an order on Thursday temporarily halting the $24.6 billion merger following a challenge by the state attorney general, according to Bloomberg. The judge canceled an August 12 hearing and scheduled a trial on the merits of the merger for September 30. Kroger and Albertsons, the parent companies of Food 4 Less, Vons, and Pavilions, have agreed not to finalize the deal until the judge rules.
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.
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.
You touched on one part of the subject that most ignore, and that is the divested stores. I worked for a large Northern California chain that in the year 2000 purchased stores that were divested in the Albertsons/Lucky merger in the Las Vegas, and Albuquerque markets, and Kroger did the same in the Northern California market, so many Lucky stores became Ralph’s or Raley’s supermarkets. Working in the industry myself for years I knew this was not a good idea as supermarket shoppers are extremely loyal to their stores of choice, and a new name entering a market has a… Read more »
Sounds as if they are seeking to create a huge Monopoly of sorts. And in doing so each store therein would sell private label goods that are priced differently and named differently.but content is the same. No value for money is a closed mega corporation and oversight would be next to impossible.
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
Albertsons has never been a strong brand in California. Surprisingly, they ended up being one of the last names in the grocery business, and it seems as if popularity was the kiss of death in the grocery market. Alpha Beta was an extremely popular chain owned by American Stores, when they purchased Lucky Stores they retired the Alpha Beta name, as Lucky was very popular as well. Then came Albertsons who believed that they could copy the American Stores’ success of buying out a rival and purchasing the American Stores chains of supermarkets but did the reverse and instead of… Read more »
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”.
Sounds like youre the one that brought it up. freeloaders occupy your mind, dont they? takes one to know one.
Kalm, Kween Karen. Kalm.
What’s your obsession with “freeloaders”? Must be one yourself.
You literally troll this page with the same vapid response weekly, are you really that invisible in life that you come here for attention? Just ask for a hug and move on already.
What a totally off-subject response to this article. This story is about a major employer in Southern California being bought out by a competitor and as a result of monopoly rules must be divested. Divested stores have an extremely high rate of failure and most likely will not survive. What this article is discussing is the FTC allowing a monopoly to form in the grocery workplace that will result in many stores eventually being closed and boarded up and lots of people losing their jobs. You can take your MAGA fearmongering to another forum because it is so off-topic here,… Read more »
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.
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.
But it sure would be fun(ny) if Pavillions DID become a Piggly Wiggly.
Then the locations of the relocated stores will be boarded up. No matter which way you look at it this merger will result in people losing a grocery store in their neighborhood. I really can’t see one of those Mexican-based supermarkets surviving in that location, and unless Piggly Wiggly offers outstanding customer service, like if you ask for the location of a product the employee hand-walks you to that product, and they offer low prices on everything, I don’t believe that they will be able to find a customer base here in Southern California. The building will more than likely… Read more »
Supermarket customers are a different breed, you change the name on the building and they won’t come back in. Guaranteed. I’ve seen it time and time again, the article even states that it happened when Albertsons bought Safeway and the company who bought the stores went belly up and Abertsons ended up buying many of them back and closing the rest. When Albertsons bought Lucky I’d say no fewer than 150 stores ended up being bulldozed. If this merger is allowed to go through, Kroger will not want whoever buys the property to be successful, because they will be a… Read more »
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 ..
Perhaps they are taking page from the Trader Joe’s Book…and it will not work.
We could use the competition, and the name Piggly Wiggly sounds festive, however, I’ve never been inside one, and the name doesn’t make me think “High end” that this area would require. In Northern California, a chain outside Stockton successfully revived the Lucky name and rebranded their stores, a very rare event, but it does prove an unfamiliar brand can enter a region.
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.
Prime space for a real estate developer depending if the land is owned or leased.
In this time of retail armageddon that is the last thing that consumers need.
Wherever a Ralph’s or Vons are across the street from each other or nearby the Vons or Pavilions will be offed. If Albertsons was allowed to proceed with its desire to merge with Kroger it would have been the reverse, with the Ralph’s store being offed and the Vons Pavilions store left standing. Either way, it will end up with lots of grocery workers eventually being out of work. And let’s face it, even if Whole Foods or Trader Joe’s takes over the locations, those companies do not pay their employees livable wages so that they can support their families.… Read more »
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!
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.
dont count on any chain with no stores in california to open in the highest overall wage city in the state.
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.
Appreciate the view from inside. I was a Trade Joe employee and learned how their success was created. It does not come anywhere near the travesty C&S is considering.
You are so correct, its mind-boggling that the FTC is even considering this, they had previously rejected the Albertsons/Kroger merger, so why would they even look at a Kroger/Albertsons merger, it doesn’t make any sense at all and will only result in the eventual loss of jobs and vacant buildings.
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.
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.
Sounds just convoluted enough to be their plan
That’s one outcome, but honestly I doubt that Kroger would buy any of the divested stores back since they would have a monopoly in the grocery market here in So Cal. The consumer will have no choice but to travel to their closest location or be forced to shop at high-priced Gelsons, Whole Foods, sub-par Target, or Trader Joe’s with their very limited selection of groceries, the consumer will be at Kroger’s mercy.
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.
Ugh! Given Trump’s dislike for California, I am sure you are right.
I believe that the Costco excuse is just a ploy by Kroger to try to get this approved and isn’t an issue. Costco and Walmart shoppers are an entirely different breed from Ralph’s and Vons customers, and I don’t believe that they mix much. Every time I shop at Ralphs lately I moan and groan about how much I hate being ripped off by them and swear that I’ll start shopping at Food 4 Less and Walmart, but I never do, those stores disgust me honestly.
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.
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.
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.