Business Community

Grocery merger, sale could impact Gig Harbor shoppers

Posted on September 8th, 2023 By:

A proposed merger between two major national grocery chains could affect how some Gig Harbor shoppers get their food. 

Kroger announced plans to acquire Albertsons in October 2022. Federal regulatory agencies, including the Federal Trade Commission and the Department of Justice, are reviewing the $24.6 billion deal. 

On Friday, Sept. 8, Kroger announced that if the merger is approved the company will sell 413 stores — including 104 in Washington state — to C&S Wholesale Grocer. The sale includes the QFC brand name, along with Marianos and Carrs. C&S will pay nearly $2 billion for the 413 stores.

C&S, based in New Hampshire, is primarily a wholesale grocery supply company. It also operates Piggly Wiggly and Grand Union stores in the Midwest and Carolinas.

Kroger operates a Fred Meyer at 5502 Point Fosdick Drive. Albertsons has a Safeway at 4831 Point Fosdick. Although Kroger hasn’t said which stores it will sell off, it seems unlikely that a merged chain would want to operate two stores just a half-mile apart. 

Kroger, which owns Fred Meyer, is merging with Albertson’s, which owns Safeway. The two chains currently operate grocery stores within a half-mile of each other on Point Fosdick Drive.

 Merger still months off

Kroger’s announcement of the sale to C&S said no stores will close as a result. It also promised that current collective bargaining agreements will remain after the sale, and “frontline associates (will) remain employed.”

News service Reuters first reported the pending deal earlier this week.

The merger isn’t expected to become final until early 2024, and only then if it clears regulatory hurdles. Selling 413 stores nationwide is part of the effort to clear those hurdles.

Unions, others oppose merger 

Nobody knows whether that spin-off would satisfy federal regulators. Stiff resistance to the consolidation has emerged. 

Unions representing grocery workers, including the United Food and Commercial Workers and the Teamsters, have registered objections. Seven state secretaries of state petitioned the FTC in August to reject the merger, according to an industry publication. And a coalition of about 100 groups, operating as Stop the Merger, has distributed information about its possible negative impacts on workers and consumers.  

Those against the merger argue that it could lead to higher prices for consumers, a loss of good-paying jobs for employees and difficulty in selling goods for suppliers. A pro-merger website operated by Kroger and Albertsons emphasizes the potential for lower prices and more shopping options due to supply chain improvements. 

The Safeway on Point Fosdick Drive is about a half-mile away from the Fred Meyer on the same road. Their future is unknown if a proposed merger between Fred Meyer owner Kroger and Safeway owner Albertson’s is approved.

Safeway-Albertsons merger 

If Kroger-Albertsons opts to sell off one of the Point Fosdick stores, it wouldn’t be the first time a national grocery merger forced the sale of a Gig Harbor store. 

When Albertsons and Safeway merged in 2014, regional grocery chain Haggen Food & Pharmacy purchased 146 of the combined company’s West Coast stores. The Gig Harbor Safeway was one of the 146 stores involved in the sale, which helped the new Albertsons chain comply with anti-monopoly requirements. 

The Gig Harbor Haggen opened in March 2015. It barely made it six months before the Bellingham-based chain, a victim of expanding too rapidly, closed the Gig Harbor and dozens of other stores. 

Albertsons bought back the local store and many others in a bankruptcy auction. The Point Fosdick store reopened as a Safeway on April 27, 2016. 

Colorful grocery history

Gig Harbor has a long and varied — some might say tortured — history of grocery store shakeups.

Thriftway and later QFC sold groceries for decades at the Peninsula Shopping Center on Judson. The QFC closed in 2011 and downtown has lacked a full-service grocery store ever since. Bainbridge Island-based Town and Country appeared set to open in the Peninsula Shopping Center as part of a substantial renovation in 2022, but the deal collapsed and T&C opted to postpone any plans to expand in Gig Harbor. 

What’s now the Olympic Village Shopping Center hosted a grocery store for many years, most recently Fred Meyer between 1990 and 2018. But Freddy’s moved across the highway to Point Fosdick Drive in 2018, and no grocer has operated in Olympic Village since. 

The building that’s now Metropolitan Market on Point Fosdick was a Bag ‘N Save and a QFC before Kroger repurposed it into an experimental, upscale Main & Vine in 2016. The experiment survived for nearly two years before Kroger closed it. 

Grocery options

Other current grocery options in Gig Harbor include the Albertson’s off Borgen Boulevard, which would also be part of the Kroger-Alberson’s merger but serves a different neighborhood than the Point Fosdick Safeway; Costco; Target; Finholm’s; and Harbor Greens. The latter two are locally owned.

Harbor Greens c0-owner Scott Teodoro in late July declined to discuss how the merger might affect his business.

“Our focus at Harbor Greens has always been on serving our community and providing quality products, so most of the activities of larger grocers do not dramatically affect us,” Teodoro wrote in an email to Gig Harbor Now.