An Albertsons store in El Paso, Texas
while Albertsons, based in Boise, ID, operates a large per- centage of its stores in California and the Pacific North- west. It also has a strong presence in the Chicago market, where its 188-store Jewel Osco banner operates, and where Kroger owns the 44-unit Mariano’s Fresh Market. Part of the challenge in markets like Chicago and others where the two companies overlap is that regulators will likely require the company to divest stores to other operators rather than close them. It may be difficult to find buyers for individual locations or even small groups of stores, the observer said. “Would they want to give up Mariano’s in exchange for Jewel? Maybe,” the person said. “But if they just want to sell 12 Mariano’s — would somebody buy those stores?” In addition, the merger would give Kroger a presence in the densely populated Northeastern U.S., where it current- ly does not operate. Albertsons owns the Acme super- market banner, which has about 164 store locations in several Northeastern states, in addition to the Shaw’s and Star Market banners, which have about 150 stores in New England. Albertsons also recently acquired the Kings Food
Market and Balducci’s Food Lover’s Market stores, two upscale supermarket chains operating about 25 locations in the Northeast and Mid-Atlantic. In the Western U.S., the two companies will have significant overlap. In Washington state, for example, Albertsons operates 216 Safeway and Haggen stores, while Kroger operates 114 Fred Meyer and QFC stores, according to local reports. And in neighboring Oregon, Albertsons has 121 supermarket locations, under both the Safeway and Albertsons banners, while Kroger has 51 Fred Meyer and QFC stores. In a recent filing with the Securities and Exchange Commission, Albertsons noted that it has a No. 1 or No. 2 market share in 68% of the 121 metropolitan statistical areas (MSAs) in which it operates. Even when combined, however, Kroger and Albertsons would have significantly less share of the total grocery market in the U.S. than Walmart. A recent report in The Economist pegged Walmart’s grocery market share at about 25%, compared with about 19% for the Kroger-Alb- ertsons combination.
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