More Washington State Stores Being Sold In Massive Merger

If the Costco situation in the Tri-Cities could be considered a drama, then the last near decade for grocery stores in the Tri-Cities has been a full blown saga.  It began in 2015 when the two prominent grocery store chains in our area Albertsons and Safeway completed their merger.

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Albertsons would buy all outstanding shares in Safeway and combine the operations of the two companies.  They would operate 2,230 stores in 34 states and Washington DC.  It would impact five grocery stores in our area.

Fast Forward Seven Years

Then in October of 2022 the next round of consolidation was announced.  Kroger, the parent company of Fred Meyer Stores, announced their intention to buy Albertsons.  Kroger would buy all outstanding shares of Albertsons and the company would operate under Kroger's banner.

Hold on Just a Minute...

Regulatory questions immediately arose around the deal as well as concerns about a potential monopoly.  Albertsons operates their namesake stores along with Safeway stores.  Kroger operates their namesake stores as well as Fred Meyer, Ralphs, Dillons, Smith’s, King Soopers, Fry’s, QFC, City Market, Owen’s, Jay C, Pay Less, Baker’s, Gerbes, Harris Teeter, Pick ‘n Save, Metro Market, and Mariano’s.

The merger would have seen Kroger operate 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers.  Washington State Attorney General Bob Ferguson attempt to throw up a road block, but the Washington State Supreme Court wanted no part of it.

So What is the Hold UP and How Does it Impact Tri-Cities?

The Federal Trade Commission's initial hesitancy to approve the deal or block it at the behest of some State Attorney Generals led to a proactive approach from the two grocery giants.

Kroger announced a divestiture plan in September of last year that could impact the Albertson, Safeway, and Fred Myer brands in our area as well as the QFC brand in other areas of Washington State.  Roughly 104 stores will be sold to C&S Wholesale Grocers who operate the century plus old Piggly Wiggly grocery chain.

What we don't know yet is what stores will be sold.  That won't happen until the Federal Trade Commission approves all of the moving parts.  The four aforementioned brands have 314 stores statewide.  This process is far from over, but this announcement makes it closer to reality.

That was until the FTC filed a lawsuit against the merger.  That happened after nine states, including Washington, filed a suit to block the merger.  Kroger/Albertson's has just announced they will divest even more stores as well as "additional non store assets" to get the deal done.

166 more stores are added to bring the total to 579 overall.  The Haggen brand will be added to the offering, access to the Albertson's signature and O brands will be included, a dairy facility will also be added, plus increased distribution capacity for C&S.

With the Haggen brand added to the mix it also means more Washington State stores will be sold.  Another 20 stores in Washington State are included, bringing the total to 124.  That includes the 15 Haggen stores on the West side.  Between Washington State and Oregon the total is 186 stores being sold to C&S Wholesale Grocers.

Will it be enough to get the lawsuits dropped?  The first hearing is set for August.