18 Alaska Carrs Safeway stores targeted for divestiture in Kroger-Albertsons merger

Albertsons and Kroger on Tuesday unveiled the stores in Alaska that 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 all fall under the Albertsons brand.

They consist of Carrs, Safeway, and Eagle stores in communities from the Kenai Peninsula to Anchorage to Fairbanks and North Pole, according to the proposed divestiture list.

None of the Fred Meyer stores in Alaska, which fall under the Kroger brand, are proposed for divestiture, according to the list.

The divestitures include the 11 Carrs stores that operate in Alaska, including eight in Anchorage. The 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 would also be sold.

State officials say 11 Fred Meyer stores operate in Alaska. Carrs and Safeway list 23 grocery stores in Alaska, according to their websites. Smaller stores, such as Eagle stores, also operate under the Carrs Safeway brand, according to state officials.

The merger would combine the two largest grocery chains in the U.S. 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 across 48 states, the Federal Trade Commission has said.

Kroger and Albertsons have said they plan to divest 579 stores to C&S for about $3 billion. The divestiture plan is designed to win the support of federal regulators for the deal.

Kroger and Albertsons have said the proposed merger will benefit customers, store employees, and communities across the country, with lower prices and more choices at stores. They have said no stores, distribution centers or manufacturing facilities will close from the merger.

But the Federal Trade Commission has sued to block the merger, calling it uncompetitive and the largest deal of its kind in U.S. history. The agency has said the deal would eliminate competition between Kroger and Albertsons, leading to higher prices and fewer options for groceries and other products. It would threaten the ability of thousands of grocery store workers to secure higher wages and benefits, the agency said.

Alaska’s congressional delegation has expressed support for the agency’s effort to block the merger.

They have said that like many Alaskans, they are concerned that a merger will lead to store closures and higher prices in the state. Perched at the end of the U.S. supply chain, Alaska is already to some of the highest retail prices in the U.S., and store shelves commonly run thin as storms and other issues affect overseas shipping to the state.

Many members of the Alaska Legislature have also expressed opposition to the merger. Opponents have pointed to past grocery chain mergers that resulted in closures of divested stores, including Safeway’s takeover 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 little more than a year. Critics asserted that the state erred by allowing Safeway to sell off lower-performing stores.

Rep. Zack Fields, an Anchorage Democrat, said on Tuesday that he opposes the merger. He said Carrs’ stores, such as the one at the Midtown Mall in Anchorage, provide good, fresh produce and fruits. Any outside company without an established supply chain to Alaska will have difficulty matching that level of quality, he said.

At its worst, the merger will result in consolidation, which reduces competition and harms consumers, he said. Or, in the best case, the merger rolls the dice to bring in a new grocer that he believes will not succeed here, he said.

C&S is the largest wholesale grocery supplier in the U.S., with more than 7,500 stores and military bases as clients, according to Forbes.

Established in 1918 and based in New Hampshire, it’s one of the nation’s largest privately held companies, with $33 billion in revenues, Forbes said.

It operates Grand Union grocery stores on the East Coast and Piggly Wiggly grocery stores in the Midwest, South and Northeast. The wholesale grocery company also operates warehouse and office locations in several U.S. states, including in Hawaii, allowing the company to serve retailers nationwide, the company says.

Eric Winn, chief executive of C&S, said in a prepared statement in April that the divestiture will provide the stores, assets and operators “needed to ensure these stores continue to successfully serve their communities for many generations to come.”

Rep. Jesse Sumner, a Republican from Palmer, said Alaskans are worried that C&S stores will go out of business if the deal goes through.

He said a new grocer will have difficulty competing with the merged companies, and will have difficulty shipping products more efficiently to Alaska.

“I’m worried we could end up with a lot less competition,” he said.

David Pruhs, mayor of the city of Fairbanks, said he believes C&S Wholesale has looked closely at the Alaska market, and he’s optimistic they can keep the two stores in Fairbanks operating.

“I don’t want to see stores with good choices and good employees close,” he said.

Here’s the full list of Alaska stores targeted for divestiture:

Carrs: 1340 Gambell St, Anchorage

Carrs: 1650 W Northern Lights Blvd, Anchorage

Carrs: 5600 Debarr Rd, Anchorage

Carrs: 4000 W Dimond Blvd, Anchorage

Carrs: 1501 Huffman Rd, Anchorage

Carrs: 7731 E Northern Lights Blvd, Anchorage

Carrs: 1725 Abbott Rd, Anchorage

Carrs: 2920 Seward Hwy, Anchorage

Carrs: 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

Carrs: 664 E Palmer-Wasilla HWY, Palmer

Safeway: 44428 Sterling Hwy S, Soldotna

Carrs: 595 E Parks Hwy, Wasilla