C&S Wholesale Grocers, with the backing of SoftBank Group (9984.T), is nearing a deal to acquire stores that Kroger (KR.N) and Albertsons Companies Inc (ACI.N) are looking to sell to obtain regulatory approvals for their $25 billion merger. The deal value and the number of stores included in the transaction took time to learn.
The move by C&S will help the company neutralize antitrust objections that might hinder its impending merger with Albertsons. Reuters reported in February that the supermarket operators were advancing plans to unload between 250 and 300 stores, estimated to be worth over $1 billion. These stores are located in areas where Kroger and Albertsons operate, including the Pacific Northwest, Southern California, Phoenix, and Chicago.
The sale of these stores will also ease pressure on the Federal Trade Commission, responsible for reviewing the massive merger. Various U.S. lawmakers and consumer advocacy groups have been nudging the agency to block the deal out of fears that it will lead to inflated grocery prices.
Ahead of the deal, the two firms have been reorganizing their operations to make room for a combined operation. The new organization includes an executive team headed by former Walmart (WMT.N) executive Mark Amelio, who is overseeing revamping the company’s supply chain. The overhaul is expected to create efficiencies and drive cost savings that will ultimately benefit shoppers, the companies said in an April 19 press release.
The companies also announced in April that they had completed the purchase of the assets of the struggling Piggly Wiggly Midwest, a regional grocer. The acquisition will allow the wholesale grocer to expand its presence in the Midwest, adding 55 Piggly Wiggly locations to its footprint. The acquisition will also help the company diversify its client base, which had suffered since the departure of one of its biggest customers, Ahold Delhaize, last year when the supermarket powerhouse opted to transition to self-distribution.
In addition, the companies have reportedly been expanding their partnerships with digital marketing vendors to boost customer loyalty. In the summer, the company signed a deal with AppCard, providing C&S customers with actionable data, advanced marketing tools, sophisticated promotions, and a campaign engine. The wholesale grocer has also been acquiring smaller distributors in the food industry, most recently acquiring Olean Wholesale Grocery Cooperative earlier this year.
Currently, C&S has around 7700 supermarkets across the United States and is one of the leading grocery wholesalers in the country. The company also offers multiple benefits to its employees, such as a competitive salary, comprehensive medical and dental coverage, flexible spending accounts, tuition assistance, adoption assistance, discounts on products and services, paid vacations, and retirement plans. In 2019, the company also released a series of commercials featuring its unique workplace policies to promote its brand. The ads drew significant attention, and the company attracted many candidates for open positions.