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Kroger and Albertsons will sell an additional 166 stores, the supermarket giants announced Monday in an effort to appease federal antitrust regulators trying to block their merger.
The announcement comes two months after the Federal Trade Commission, along with eight states and the District of Columbia, filed a suit to block the merger, claiming it would eliminate competition, threaten consumers’ access to affordable groceries and undermine labor unions.
While Kroger and Albertsons claim that a merger is the only way to compete with retail giants Amazon and Walmart, state and federal regulators are raising concerns that it would have a ripple effect felt by customers, employees and suppliers across the country.
Critics have been also pointed to C&S’s lack of experience handling a large fleet of stores and concerns over its limited private-label selection — which it increasingly needs to extract higher margins while drawing in cost-cutting consumers.
As part of the revised deal, Kroger and Albertsons agreed to provide C&S with more “corporate and office infrastructure” to better handle the transition and added more distribution capacity and facilities.
The merged company would also likely shut down stores to avoid duplication in certain communities, a move that would push workers out of jobs, undermine labor unions, remove price competition for local suppliers and in some cases limit vulnerable communities’ access to fresh produce, said Christine Bartholomew, a professor of law and vice dean of academic affairs at the University at Buffalo School of Law.