Major Grocery Store Chains to Even More Stores in Louisiana and Texas in Merger Deal

More grocery stores throughout Louisiana and Texas are set to be impacted by a proposed merger in the grocery store sector.

In response to a government agency accusing them of potentially violating anti-trust law, two major grocery store chains are planning to divest more stores than originally planned.

The hope is that the enhanced agreement will satisfy the Federal Trade Commission, the agency that vowed to get a judge to stop the merger between Kroger and Albertsons.

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Several stores across Texas and Louisiana are going to be impacted by the divestiture plan put forward by Kroger. Looking at the information that has become public about the merger, 28 stores in Texas will be impacted while two Louisiana stores are.

The full map of the two companies' stores across the country can be seen below.

Texas is Albertsons’ second-biggest state in terms of number of stores: it clocks in with 44 Albertsons locations. Louisiana, meanwhile, has a handful of stores. Under the original agreement, Louisiana would see two stores sold and Texas would see 26 sold. All stores slated to be divested would be sold to C&S Wholesale Grocers.

Under the new plan, an additional two stores across both states would be sold.

READ MORE: Texas, Louisiana Grocers Selling More Stores as Merger Hits Snag

According to the news outlet GroceryDive, the move does appear to be an attempt to head off the FTC's claims.

While Kroger and Albertsons forcefully refuted the FTC’s conclusion that the merger would hurt competitors, consumers and workers, the plan the grocers made public last week represents a clear declaration by the companies that they have heard and tried to address the agency’s concerns, said Michael Infranco, assistant vice president of retail intelligence provider RetailStat.

“I think that’s what the point of [the revised deal] was — to at least be able to say, ‘We’ve put together a standalone business and we’ve capitalized it to the point where we believe that this business will be able to compete on day one,’” said Infranco.

The updated plan also includes "increased distribution capacity, provisions for expanded transition services and an additional dairy facility."

All of which is a big deal, according to Infranco, who was quoted above.

“If you’re going to spin off something that you had as part of your business, it has to be a viable business,” he said. “You have to include everything needed to stand alone. And I think adding some of these ancillary assets and services goes a bit of a way to doing that.”

But the FTC will likely still strongly oppose the deal.

“This supermarket megamerger comes as American consumers have seen the cost of groceries rise steadily over the past few years,” said the director of the FTC’s Bureau of Competition, Henry Liu, about the original agreement. “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.”

Kroger responded to the FTC's challenge quickly at the time.

"Contrary to the FTC’s statements, blocking Kroger’s merger with Albertsons Companies will actually harm the very people the FTC purports to serve: America’s consumers and workers," Kroger said in a statement on Monday. "Kroger’s business model is to take costs out of the business and invest in lowering prices for customers. Kroger has reduced prices every year since 2003, resulting in $5 billion invested to lower prices and a 5% reduction in gross margin over this period."

"This business model is immediately applied to merger companies," the company added. "Kroger has a proven track record of lowering prices so more customers benefit from fresh, affordable food, and our proposed merger with Albertsons will mean even lower prices and more choices for America’s consumers."

The FTC has made several moves to stop mergers in recent years, though with little success. Under its current commissioner, Lina Khan, the agency has unsuccessfully opposed mergers involving major software/video game companies and other big tech companies - including Facebook and Instagram parent, Meta.