Albertsons and Kroger on Tuesday unveiled the Alaska stores they plan to sell to C&S Wholesale Grocers as part of their controversial $24.6 billion merger plan.
The 18 stores are located in communities across Alaska. They are all owned by the Albertsons brand.
The proposed divestiture list includes Carrs, Safeway and Eagle stores located in communities from the Kenai Peninsula to Fairbanks and North Pole.
According to the listing, none of the Fred Meyer stores in Alaska, which are owned by the Kroger brand, are being offered for sale.
The divestitures include all 11 Carrs stores operating in Alaska, including eight in Anchorage. Other Carrs stores to be divested are in Eagle River, Palmer and Wasilla.
Six Safeway stores would be divested, including two in Fairbanks and one each in North Pole, Juneau, Kenai and Soldotna.
The small Eagle store in Girdwood is also said to be sold.
State officials say there are 11 Fred Meyer stores operating in Alaska. Carrs and Safeway have 23 in Alaska, according to their websites. Smaller stores, such as Eagle stores, also operate under the Carrs Safeway brand, state officials say.
The merger would combine the two largest grocery chains in the United States. If it receives regulatory approval and can be completed, Kroger and Albertsons would operate more than 5,000 stores and about 4,000 retail pharmacies while employing nearly 700,000 workers in 48 states, the Federal Trade Commission said.
Kroger and Albertsons have announced plans to sell 579 stores to C&S for about $3 billion. The divestiture plan is aimed at gaining support from federal regulators for the deal.
Kroger and Albertsons said the proposed merger would benefit customers, store employees and communities across the country with lower prices and more choices in stores. They said no stores, distribution centers or manufacturing plants would close as a result of the merger.
But the Federal Trade Commission (FTC) sued to block the merger, calling it uncompetitive and the largest such deal in U.S. history. The agency said the deal would eliminate competition between Kroger and Albertsons, leading to higher prices and less choice for groceries and other items. It would threaten the ability of thousands of supermarket workers to get higher wages and benefits, the agency said.
Alaska’s congressional delegation has expressed support for the agency’s efforts to block the merger.
They said they, like many Alaskans, fear a merger would lead to store closures and higher prices in the state. Located at the end of the U.S. supply chain, Alaska already has some of the highest retail prices in the country, and store shelves typically run low when storms and other problems affect overseas shipments to the state.
Many members of the Alaska Legislature have also voiced opposition to the merger. Opponents pointed to past grocery chain mergers that resulted in the closure of the divested stores, including Safeway’s purchase of the Alaska-based Carrs chain for $330 million in 1999.
At the time, the state of Alaska required that seven stores be sold to a competitor as part of the deal. Alaska Marketplace acquired six of those stores, but they closed in just over a year. Critics said the state made a mistake by allowing Safeway to sell the underperforming stores.
Anchorage Democratic Rep. Zack Fields said Tuesday he opposes the merger. He said Carrs stores, like the one at Midtown Mall in Anchorage, provide fresh, good-quality produce and fruit. Any outside company without an established supply chain in Alaska will have a hard time matching that level of quality, he said.
In the worst case, the merger will lead to consolidation, which will reduce competition and hurt consumers, he said. Or, in the best case, the merger could bring in a new grocer that he says won’t succeed here, he added.
C&S is the largest wholesale grocery supplier in the United States, with more than 7,500 stores and military bases as customers, according to Forbes.
Founded in 1918 and based in New Hampshire, it is one of the largest private companies in the country, with $33 billion in revenue, Forbes said.
It operates Grand Union grocery stores on the East Coast and Piggly Wiggly grocery stores in the Midwest, South and Northeast. The grocery wholesaler also operates warehouses and offices in several U.S. states, including Hawaii, allowing it to serve retailers nationwide, the company said.
Eric Winn, C&S’s chief executive, said in a prepared statement in April that the sale would provide the stores, assets and operators “necessary to ensure these stores continue to successfully serve their communities for many generations to come.”
Rep. Jesse Sumner, a Republican from Palmer, said Alaskans fear C&S stores will go bankrupt if the deal goes through.
He said a new grocer would have a hard time competing with the merged companies and would struggle to ship its products more efficiently to Alaska.
“I fear we will end up with much less competition,” he said.
Fairbanks Mayor David Pruhs said he believes C&S Wholesale has studied the Alaska market closely and is optimistic that the two Fairbanks stores can keep operating.
“I don’t want to see stores with good selections and good employees close,” he said.
Here is the full list of Alaska stores targeted for divestiture:
Address: 1340 Gambell St, Anchorage
Address: 1650 W Northern Lights Blvd, Anchorage
Address: 5600 Debarr Rd, Anchorage
Streets: 4000 W Dimond Blvd, Anchorage
Address: 1501 Huffman Rd, Anchorage
Address: 7731 E Northern Lights Blvd, Anchorage
Address: 1725 Abbott Rd, Anchorage
Address: 2920 Seward Hwy, Anchorage
Address: 11409 Business Park Blvd, Eagle River
Safeway: 3627 Airport Way, Fairbanks
Safeway: 30 College Rd, Fairbanks
Eagle: 147 Hightower Rd, Girdwood
Safeway: 3033 Vintage Blvd, Juneau
Safeway: 10576 Kenai Spur Hwy Ste A, Kenai
Safeway: 301 N Santa Claus Ln, North Pole
Carrères: 664 E Palmer-Wasilla HWY, Palmer
Safeway: 44428 Sterling Highway S, Soldotna
Cars: 595 E Parks Hwy, Wasilla
• • •