The Safeway stores in Fairbanks and North Pole are on the list of stores that would be sold off in a $24.6 billion merger between Albertsons and Kroger, according to a plan the two corporations unveiled Tuesday.
The Interior stores join a list of 15 other stores in Alaska that would be divested to C&S Wholesale Grocers. Four additional Safeways in Juneau, Kenai and Soldotna would be sold as well as eight Carrs stores in Anchorage, along with one each in Eagle River, Palmer and Wasilla. Girdwood’s Eagle grocery store would also be sold. Kodiak’s Safeway store was not on the list of 18.
C&S Wholesale Grocers’ operates mostly as the largest wholesale grocery supplier in the nation. It supplies goods to more than 7,500 stores and military bases.
Its grocery store operations have a smaller footprint with about 160 stores, as it operates Grand Union stores on the East Coast and Piggly Wiggly grocery stores in the Midwest, the South and the Northeast. It operates about 50 distribution centers nationwide, including some in Hawaii.
According to the consolidation plan, no Fred Meyer stores would be sold.
Both companies claim that the merger and divestment of stores will not result store closures or loss of employment and that “all frontline associates will remain employed.”
The merger, which faces staunch opposition from labor groups and politicians, will combine the nation’s two largest chains in the United States. It faces regulatory approval hurdles from the Federal Trade Commission. Several states have filed lawsuits to block the merger, claiming it would create food deserts in several communities.
Kroger operates 11 Fred Meyer stores in Alaska, while Alberstons owns 23 Safeway and Carrs grocery stores, along with the smaller Eagle grocery markets.
Kroger and Albertsons have bumped the number of stores they want to divest from 416 to 579 to win FTC support, which has closely scrutinized the deal.
The two companies claim the merger will benefit customers, employees and communities by bringing lower prices and better selection of products.
The FTC filed its own lawsuit in February to block the merger. In its court document, the FTC said the grocery store merger would be the largest and most uncompetitive in the nation’s history.
“This supermarket mega-merger comes as American consumers have seen the cost of groceries rise steadily over the past few years,” said Henry Liu, director of the FTC’s Bureau of Competition, in a February news release. “Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today.”
The lawsuit remains pending in federal court.
The United Food & Commercial Workers, which includes chapters in Alaska, remains staunchly opposed to the merger.
“We remain focused on stopping the proposed mega-merger for the same reasons we have stated since it was first announced over 20 months ago — because we know it would harm workers, it would harm shoppers, it would harm suppliers and communities, and it is illegal,” UFCW said in a Tuesday statement.
Silvana Tirban, treasurer/secretary of UFCW Local 1496, said not much has changed since the FTC filed its lawsuit in February and legal hearings are scheduled through at least September.
“Hopefully by then, we will have a clearer message,” she said.
Tirban said UFCW remains focused on improving its members’ working conditions and benefits and continues “having a positive impact on their lives and the communities we serve.”
UFCW represents about 2,000 grocery workers in Alaska, including those with Safeway.
“Our message is that we are here to have their backs, our members will remain unionized and continue to have a collective voice and UFCW Local 1496 is prepared to represent them today,” Tirban said.
Alaska’s Congressional delegation supported the FTC’s efforts to block the merger. Last September, the delegation sent a letter with concerns that store closures will follow along with higher food costs.
Rep. Mary Peltola (D-Alaska) has been vocal about the merger, including concerns about impacts on the workforce.
“I fought to stop the Kroger-Albertson merger last year and will continue to oppose the proposal,” Peltola said in a prepared statement on Wednesday. “The planned store divestments would reduce competition for Alaskans who already have limited options for groceries and other goods. Food security isn’t just a talking point for Alaskans — it’s why I am with my family putting up fish for the winter in state right now. I will continue to support the FTC’s efforts to block this merger.”
Nearly half of the Alaska Legislature had similar concerns when 24 of them sent a joint letter in October 2023 to the FTC asking the federal agency to block the merger.
Alaska House Rep. Ashley Carrick (D-Fairbanks) said several Interior Alaska delegation members signed the joint letter.
“Essentially, the main issue for many of us was a lack of grocery stores,” she said.
Carrick said she was concerned that a merger and sale of the Fairbanks and North Pole Safeway stores would fail to meet the current parity.
“We have such a need for having our grocery costs competitive, and this would remove that competition in the short term and perhaps long term,” Carrick said.
She noted that Three Bears Alaska is slated to open in North Pole in the next several months. The North Pole location will be one of Three Bears’ largest locations, with a full-service grocery store.
“It is a net neutral situation at best,” Carrick said. “One thing is that this perhaps will lead to upscale for our local grocers, but that is more long-term thinking.”
Lawmakers were also concerned history could repeat itself in Alaska, similar to Safeway’s $330 million purchase of the Carrs chain in 1999.
Alaska required that Safeway sell seven of the stores to competitors to guarantee a competitive market. Alaska Marketplace purchased six of the sites but closed them a year later.
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