Just which 12 Albertsons Corp.-owned stores in Wyoming will be sold off to C&S Wholesale Grocers will not be disclosed until the regulatory process examining the proposed $25 billion merger of grocery giants Kroger and Albertsons is nearly concluded.
“We anticipate being able to share these details closer to closing,” a Kroger spokesman said in an email to Cowboy State Daily asking which Wyoming stores will be sold. “(But) because we are still in the regulatory process, we are not in a position at this time to share the specific locations that will be divested to continue serving the community under a different owner.”
Kroger and Albertsons jointly announced the sale of 413 stores to C&S Wholesale Grocers a little more than a week ago, touting the sale as a solution to antitrust concerns with the merger of the two grocery giants.
The deal ensures that the Albert Krogerson merger will meet all the promises that have been made regarding the deal, Kroger’s CEO Rodney McMullen said in making the announcement.
“Following the announcement of our proposed merger with Albertsons Cos., we embarked on a robust and thoughtful process to identify a well-capitalized buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today,” he said. “C&S achieves all these objectives.”
He also said C&S “has the financial strength to continue investing in associates and the business for the long run” and that it “commits to honoring all collective bargaining agreements which include industry-leading benefits, retaining frontline associates and further investing for growth.”
More Details On The Sale
The $1.9 billion dollar deal is outlined in more detail in filings with the U.S. Securities and Exchange Commission in what’s known as a Form 8-K.
Prior to announcing the deal with C&S Wholesale Grocers, Kroger had said it was willing to spin off up to 650 supermarket stores to a new business called Spinco to settle regulatory concerns about competition in the grocery sector after theproposed $25 billion merger between it and Albertsons.
Beyond that, the two companies would reevaluate their plans, and could walk back the proposed merger.
As part of Albert Krogerson deal with C&S, the proposed SpinCo Business will be sold off to C&S instead.
Under the terms of the deal, C&S could be required to buy as many as 237 additional stores. The exact geographies of those stores were not spelled out in the paperwork.
In the event more stores must be divested to C&S, the wholesale grocer would pay Kroger an additional cash consideration for each store, based on an agreed-upon formula.
In addition to Wyoming and the District of Columbia, the breakdown of states with stores that will be sold includes Washington, California, Colorado, Oregon, Texas, Louisiana, Arizona, Nevada, Illinois, Alaska, Idaho, New Mexico, Montana, Utah, Maryland, and Virginia.
Some of the states will include a mixture of both Albertsons and Kroger stores, namely Washington, California and Oregon.
Washington will have the most stores sold at 104 Albertsons and Kroger outlets, followed by California with 66 Albertsons and Kroger stores, and Colorado with 52 Albertsons stores.
C&S Is One Of World’s Largest Wholesalers
C&S Wholesaler Grocers is one of the world’s largest grocery wholesalers with annual sales of $30 billion for the distribution of some 100,000 products to 7,500 independent supermarkets and chain stores from Maine to Texas and Hawaii. The family-owned business already has 33 distribution warehouses in some 15 states, coast to coast.
Listed among its existing customers are Safeway, Target, A&P, Stop & Shop, Ralphs and Foodtown.
While he’s never appeared on an international wealth ranking, owner Rick Cohen is among the richest people in the world. His company by itself is worth an estimated $11.2 billion, according to the Bloomberg index, not counting any of his other properties.
Cohen lives in Keene, New Hampshire, but does have a Wyoming tie. He owns a home in Wilson, where, according to an online news article in the Keene Sentinel, his daughter Jill’s wedding reception was held in 2018.
Cohen is the third-generation owner of C&S, which was begun in 1918 by Israel Cohen with business partner Abraham Siegel. The partners started with a 5,000-square-foot warehouse in Worcester, Massachusetts, managed by just three workers.
Competition at the time was fierce, but through efficient warehouse practices and detailed attention to customer service, C&S put itself on an upward trajectory early on and never looked back.
C&S Growth Accelerates
By 1955, C&S had already grown into a mid-sized wholesale company that was still on an aggressive growth track. It moved into a 35,000-square-foot facility in Worcester, winning over larger accounts with reputable companies, which quickly boosted sales to the $2 million range.
By the time Rick Cohen became involved with the company in 1974, C&S had annual sales of $14 million, but still lacked a modern warehouse facility, severely hindering its growth potential.
Getting a large enough new facility, though, was a chicken-egg proposition. The company couldn’t get larger accounts without a bigger facility and couldn’t afford a bigger facility without larger accounts.
Cohen had a novel solution. He would start by moving the business west, gaining better access to interstate highways, as well as new markets.
He also built a 300,000-square-foot warehouse in 1981, which helped them land much larger clients than before. Employees took a pay cut to help support these bold moves by C&S, and were soon rewarded with higher salaries than they had before the pay cuts.
C&S has continued to grow under Cohen’s ownership since then, picking up bankrupt Associated Wholesalers in 2014 and Piggly Wiggly Midwest in 2021.
This latest deal with Kroger, if it passes regulatory muster, will not only add at least 413 more stores to C&S, but eight distribution offices, two regional offices and five private labels across 17 states and the District of Columbia.
Renée Jean can be reached at renee@cowboystatedaily.com.
