The The closing of the Fred Meyer grocery store in 2002 Serving Rockwood was a blow to the Gresham neighborhood, leaving a hole in its center and fewer options for groceries.
The next hit came in 2015, when a merger between the Albertsons and Safeway brands resulted in the closing of a nearby Safeway store. That left the Albertsons store as the last chain supermarket in the area.
Now, an offer from Kroger Co. Residents are wondering if that store will also close in order to buy an Albertsons. Catherine Nicewood, president of the neighborhood association, said it would be “a blow to the community” if Albertsons were to close in Rockwood as a result of the merger, even though it is one of the most expensive options left.
“Rockwood is considered a food desert, and we’re trying to bring places where people can easily get healthier food options at a more affordable price,” Nicewood said. Losing Albertsons would be another setback.
The $24.6 billion sale will bring Albertsons, Safeway, Fred Meyer and QFC under one corporate umbrella, leaving the chains with dozens of Oregon stores that may already be considered redundant.
The Oregonian/OregonLive identified about 33 Kroger and Albertsons stores within a mile of each other across the state, including 20 in the Portland metro area. More than 100 are less than two miles apart.
Many are within sight of the neighboring store. For example, in Oregon City, Fred Meyer, Safeway, and Albertsons are within blocks of each other.
Albertsons and Kroger in Oregon
Dozens of Kroger Co.-owned Oregon grocery stores. (Fred Meyer and QFC) and Albertsons Cos. (Albertsons and Safeway) are located near other stores and may become redundant if the chains merge. Here, stores are displayed with a 1 mile buffer.
Kroger and Albertsons are two of the largest grocers in the state with a combined 171 stores.
Kroger and Albertsons will have to exit hundreds of stores nationally to ease anti-competitive concerns from regulators, including the Federal Trade Commission, according to retail analysts and consumer advocates.
In anticipation, Kroger and Albertsons said in a statement announcement Last week, they said they were ready to spin off between 100 and 375 locations into a separate company to be run by Albertsons shareholders — a company called SpinCo in the filing.
In Oregon, Kroger and Albertsons are two of the largest grocery chains, with a combined market share larger than Walmart.
Kroger did not address the potential store closings In a filing with the Securities and Exchange Commission, however, retail analysts said store closings are common during major retail mergers. Spinning unnecessary stores is also not a reliable solution.
followed by 2015 Albertsons and Safeway mergerregulators required the chains to find buyers for about 20 Oregon stores to keep the market competitive.
Haggen has agreed to buy a small Washington state grocery chain and rebranded 146 West Coast Safeway and Albertsons locations following the merger with Safeway. But within months, the overextended Haggen filed for bankruptcy and sold some of those stores back to Albertsons for a lower price. Others were closed for good.
Kroger and Albertsons executives expect the deal to close in early 2024, at which point the two companies will begin making choices about which stores will stay or go, and under which banner they will operate.
Kevin Coupe, retail analyst and author of the grocery blog Morning News Beatthinks the companies’ proposal to divest up to 375 stores may not satisfy regulators.
“I think they’re going to have to give up about a thousand stores,” Coupe said. “It’s a tougher FTC than maybe they’re used to, and we’re in a time of rising consumer prices.”
According to Kroger, the proposed combined company would have annual revenue of $209 billion and operate 4,996 stores nationwide. It will close in on rival Walmart with just $10 billion in annual revenue from retail sales.
at the Safeway-Albertsons delivery center off Beaverton Hillsdale Highway in Southwest Portland.
Meanwhile, the deal is being pushed back by consumer advocates, unions and politicians as companies seek to consolidate stores amid soaring food prices.
Jagjit Nagra, executive director of the nonprofit Oregon Consumer Justice, said the proposed deal would be bad for consumers because less competition could lead to spiraling grocery prices. He said the potential merger could result in more food deserts around less profitable areas.
“They won’t lock their biggest bright stars in their wobble,” he said. “They’re probably going to go to lower performers, stores that are adjacent to rougher neighborhoods, for example, or areas with more crime, or areas that are more rural.”
Kelley Fuller, a resident of Depot Bay on the Central Oregon Coast, said the closest Fred Meyer and Safeway in Newport are across the street from each other.
“If the Kroger and Albertsons merger is allowed, we will almost certainly lose that Safeway,” Fuller said, “which would mean losing not only the grocery store, but the pharmacies inside.”
He said when Lincoln City already lost its pharmacy Bi-Mart exited the pharmacy businessand competing pharmacies subsequently became noticeably more “crowded and chaotic.”
And he said having two supermarkets was important because the pandemic had disrupted the supply chain.
“When Fred Meyer didn’t have the basics, Safeway sometimes still had them,” he said. “It would be worse for local communities if we didn’t have a Safeway to shop at.”
Nagra, a state consumer advocacy group, said the Kroger-Albertsons merger leaves areas that already have food deserts with even fewer options.
“Not only will they take away people’s ability to choose, but they will directly affect people’s health,” he said. “Because if you don’t have access to good quality food, it’s fair to assume that your health outcomes might not be as strong.”
He said the deal “could cause greater harm and squeeze out consumers who are already struggling to afford food.”
But Kroger leaders said in his statement it will invest $500 million to “lower prices for customers” and $1 billion to increase employee wages and benefits.
Earlier this week, US Sens. Amy Klobuchar of Minnesota and Mike Lee of Utah said in the statement He said the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights “will hold hearings focusing on this proposed merger and the potential consequences for consumers if this deal moves forward.”
The committee has “serious concerns” about the merger and “wants a competitive grocery market so that American families can put food on the table,” Klobuchar and Lee said.
–Christine de Leon, kdeleon@oregonian.com503-221-8506
