Kroger and Albertsons plan to sell off stores to get approval for their merger, including Colorado locations

king soopers
Matt Bloom/CPR News
A Safeway worker gathers shopping carts outside of a store in Cañon City on March 22, 2023.

Kroger and Albertsons are offloading more stores in a bid to get regulatory approval for their $25 billion merger, including supermarkets in Colorado, where the companies operate King Soopers and Safeway.

The grocery giants initially announced plans to sell 413 stores across the U.S. to New Hampshire-based C&S Wholesale Grocers in September in order to address concerns the merger might violate antitrust laws. The new agreement includes an additional 166 locations. The updated agreement stipulates that C&S will license the Safeway banner — owned by Albertsons — in Colorado.

Between the initial plan and the new deal, a total of 91 Colorado Albertsons could be sold.

The U.S. Federal Trade Commission sued to block the merger earlier this year on the grounds that the resulting lack of competition would be bad for shoppers and workers. Colorado Attorney General Phil Weiser also filed a lawsuit to stop the deal.

In its lawsuit, the FTC said the initial divestiture plan was inadequate and that C&S wouldn’t be a viable competitor under the agreement. The new plan seeks to give C&S a better toehold.

“We are confident this expanded divestiture package will provide the stores, supporting assets, and expert operators needed to ensure these stores continue to successfully serve their communities for many generations to come,” Eric Winn, CEO of C&S, said in a joint statement announcing the new plan.

Local leaders in Colorado for the United Food & Commercial Workers union raised objections to the sale of stores to C&S as a means to allay antitrust concerns when the deal was first announced. They cited a similar deal used to overcome regulatory hurdles when Albertsons merged with Safeway in 2015. The buyer in that instance, Haggen, went bankrupt less than a year after the sale. In the aftermath, Albertsons bought back many of the stores it had just sold.

“The updated divestiture plan continues to ensure no stores will close as a result of the merger and that all frontline associates will remain employed [and] all existing collective bargaining agreements will continue,” Kroger CEO Rodney McMullen said in the statement.

Kroger operates 148 King Soopers and City Markets stores in Colorado and is the largest chain in the state. Albertsons has 105 Safeway and Albertsons stores and is the state’s third-largest grocery chain.