The 2002 closure of the Fred Meyer grocery store serving Rockwood was a blow to the Gresham neighborhood, leaving a gap in its heart and one much less possibility for groceries.
The subsequent hit got here in 2015, when a merger between the Albertsons and Safeway manufacturers resulted in the closure of a Safeway store close by. That left an Albertsons store as the final chain grocery store in the space.
Now, a proposal from Kroger Co. to purchase Albertsons has residents questioning if that store might find yourself shuttered, too. If Albertsons have been to shut in Rockwood in consequence of the merger, it might “put a dent in the community,” mentioned Catherine Nicewood, president of the neighborhood affiliation, although it’s one of the most costly choices remaining.
“Rockwood is considered a food desert, and we’ve been trying to bring in places where people could easily access healthier food options at an affordable price,” Nicewood mentioned. Losing the Albertsons could be another setback.
The $24.6 billion sale would put Albertsons, Safeway, Fred Meyer and QFC underneath one company umbrella, and depart the chains with dozens of Oregon shops that would now be thought-about redundant.
The Oregonian/OregonDwell recognized roughly 33 Kroger and Albertsons-owned shops throughout the state that sit inside a mile of each other, together with 20 in the Portland metro space. More than 100 are lower than two miles aside.
Many are inside line-of-sight of a neighboring store. In Oregon City, for instance, a Fred Meyer, Safeway and Albertsons are inside blocks of each other.
Albertsons and Kroger in Oregon
Dozens of Oregon grocery shops owned by Kroger Co. (Fred Meyer and QFC) and Albertsons Cos. (Albertsons and Safeway) are situated close to different shops and could possibly be thought-about redundant if the chains merge. Here, shops are proven with a 1-mile buffer.
Kroger and Albertsons are two of the state’s greatest grocery chains, with 171 shops altogether.
Kroger and Albertsons would seemingly must divest a whole bunch of shops nationally to ease anticompetitive considerations from regulators together with the Federal Trade Commission, based on retail analysts and shopper advocates.
Anticipating this, Kroger and Albertsons mentioned in an announcement final week that they’re prepared to divest between 100 and 375 areas by spinning them off right into a separate firm — referred to as SpinCo in the submitting — that will be managed by Albertsons shareholders.
In Oregon, Kroger and Albertsons are two of the greatest grocery chains, with a mixed market share that’s even larger than Walmart.
Kroger didn’t address potential store closings in its submitting with the Securities Exchange Commission, however it’s frequent to shutter shops throughout a big retail merger, based on retail analysts. Spinning off the redundant shops isn’t a surefire resolution, both.
Following the 2015 merger of Albertsons and Safeway, regulators required the chains to discover a purchaser for about 20 shops in Oregon in a bid to maintain the market aggressive.
Haggen, a small Washington state grocery chain, agreed to purchase and rebrand 146 West Coast Safeway and Albertsons areas following the merger with Safeway. But inside months, the overextended Haggen filed for chapter and sold several of those stores again to Albertsons for a less expensive value. Others closed for good.
Executives at Kroger and Albertsons anticipate the deal to undergo in early 2024 and, at that time, the two firms will begin making decisions on which shops will keep or go and underneath which banner they’ll function.
Kevin Coupe, retail analyst and creator of the grocery weblog Morning News Beat, thinks that the firms’ proposal to divest as much as 375 shops won’t fulfill regulators.
“I think they’re going to have to divest closer to a thousand stores,” Coupe mentioned. “This is a much tougher FTC than maybe they’re used to dealing with, and we’re at a time of rising consumer prices.”
The proposed mixed firm would have an annual income of $209 billion and function 4,996 shops nationwide, based on Kroger. It would come near rivaling Walmart, falling solely $10 billion in annual income brief to the retail behemoth.
Meanwhile, the deal is dealing with pushback from shopper advocates, labor unions and politicians as the firms look to consolidate shops amid skyrocketing meals costs.
Jagjit Nagra, govt director of the nonprofit Oregon Consumer Justice, mentioned the proposed deal could be unhealthy for customers as much less competitors might spell grocery costs going unchecked. He mentioned the potential merger might additionally outcome in extra meals deserts that’s seemingly round areas with decrease incomes.
“They’re not going to close down their biggest brightest stars within their quiver,” he mentioned. “They’re going to be probably going out to lower performers, performing stores, maybe stores that are adjacent to, say, rougher neighborhoods, or in areas that have more crime, or maybe areas that are just more rural.”
Kelley Fuller, a resident of Depoe Bay on the central Oregon coast, mentioned the closest Fred Meyer and Safeway in Newport are throughout the avenue from each other.
“If Kroger and Albertson are allowed to merge, we’d almost certainly lose that Safeway,” Fuller mentioned, “which would mean not only losing a grocery store, but also the pharmacy inside it.”
She mentioned Lincoln City already misplaced a pharmacy when Bi-Mart pulled out of the pharmacy business, and that competing pharmacies obtained noticeably extra “crowded and chaotic” afterward.
And she mentioned having two supermarkets was essential as the pandemic wreaked havoc on the provide chain.
“When Fred Meyer was out of basics, Safeway sometimes still had them,” she mentioned. “It would have been worse for the local communities if we had not also had Safeway to shop at.”
Nagra, with a state shopper advocacy group, mentioned the Kroger-Albertsons merger depart areas which can be already meals deserts with even fewer decisions.
“Not only would they take away from people’s ability to choose, now they’d actually directly impact people’s health,” he mentioned. “Because if you don’t have access to good quality food, I think it’s fair to assume that your health outcomes may not be as strong.”
He mentioned the deal might “cause greater harm and kind of squeeze consumers who are already struggling to afford food.”
But Kroger leaders mentioned in a statement it’ll reinvest $500 million to “reduce prices for customers” and $1 billion to boost worker wages and advantages.
Earlier this week, U.S. Sens. Amy Klobuchar of Minnesota and Mike Lee of Utah said in a statement that the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights will “hold a hearing focused on this proposed merger and the consequences consumers may face if this deal moves forward.”
The committee has “serious concerns” about the merger and needs a grocery market that “remains competitive so that American families can afford to put food on the table,” Klobuchar and Lee mentioned.
–Kristine de Leon, [email protected], 503-221-8506