Major Grocery Store Chain Closing 28 Stores in Louisiana and Texas

Your grocery store options may be shrinking in Louisiana and Texas before too long, if a merger between two giants is allowed to go through.

And that merger – between Kroeger and Albertsons – could very well have an impact on local jobs and food options.

What’s Happening?

The Kroger Co. is intent on buying out the Albertsons name, According to one report, part of the merger would include shedding over 400 stores, mostly in the western part of the U.S.

To address the regulatory concerns, in September ’23, Kroger and Albertsons announced a large divestiture of 413 stores to C&S Wholesale Grocers. Most of the divested stores are located on the West Coast, while the companies have limited overlap in other areas (see below). As part of the divestiture agreement, the buyer has agreed to purchase an additional 237 stores if such sales are required by regulators.

However, there are some concerns among the government agencies that regulate such big moves. In the report linked above, it’s noted that “the FTC and several lawmakers have expressed concerns about these divestitures, claiming that in previous instances, divested stores were unable to compete and eventually went bankrupt.”
But the deal could still go through.

Will Louisiana and Texas Be Affected?

Several stores across both states are going to be impacted in the divestiture plan put forward by Kroger. Looking at the information that has become public about the merger, 28 stores in Texas will be impacted while two Louisiana stores are.

Texas is Albertsons’ second-biggest state in terms of number of stores: it clocks in with 44 Albertsons locations, and 26 are slated to be closed.

Kroger and Albertsons each operate more than 2,000 stores across the country, and the merger between the merger will not close until after January 17, 2024.

Further complicating matters, while the two chains have agreed on a merger, it’s not a done deal. Those same government regulators who were questioning the deal could try to block it, resulting in legal action that might delay the deal.

In its report on the deal, the Kroger Co. wrote that “Given the Federal Trade Commission’s (FTC) increasingly aggressive enforcement stance against mergers and acquisitions, as well as Chair Lina Khan’s previous writings on food retail specifically, the agency appears poised to try to block the transaction—even with divestitures.”
“The FTC and U.S. Justice Department’s (DOJ) recently unveiled draft revisions to the agencies’ merger guidelines further suggest that they plan to challenge more mergers—and to do so more aggressively than under past administrations,” it added.