C&S Wholesale Grocers BB #:137315 reportedly isn’t thrilled with the lot of divestitures from the Kroger BB #:100073-Albertsons BB #:193326 merger, according to a letter executives wrote to the California attorney general.
The letter was brought up in this week’s arguments in U.S. District Court in Portland, OR, and said, C&S “would ‘compete more effectively’ if it were to obtain exclusive rights” to a more well-known banner like Safeway, Vons, or Jewel-Osco, as reported by the Los Angeles Times.
The Times said C&S referred to the banners the company is being offered in the divestiture – Haggen, Mariano’s, QFC, and Carr’s – as Kroger’s “worst.”
An initial divestiture of more than 400 stores was expanded to 579, mostly Albertsons stores, along with six distribution centers.
In court, however, C&S CEO Eric Winn said the company is “excited” about the brands it is acquiring.
Winn also said that C&S won’t promise not to close stores following the merger’s completion, and the company’s past acquisitions – and attitude toward closing underperforming stores – was questioned.
An FTC attorney said C&S has a “poor record of operating supermarkets,” and called into question whether the company plans to keep the stores open or focus on the wholesale side of the business.
At the hearing, attorneys questioned Alona Florenz, C&S’s senior vice president of corporate development and financial planning & analysis and a colleague about a text chain discussing the company’s acquisition stores divested in the Tops Markets BB #:103173/Price Chopper BB #:104206 merger in 2021.
The Cincinnati Enquirer reported that Florenz and a colleague joked that there would be no buyers for Tops stores, saying “they are all dogs,” and that the company would “make out” with the wholesale side of the transaction.
C&S acquired a dozen Grand Union stores in 2022 in the Tops divestiture. It continues to operate 11 of them, though C&S president of retail operations Mark McGowan testified they are not profitable, according to Enquirer reporting.
“Grand Union is not achieving our expectations, though improving,” McGowan said, in his testimony.
