THE FRIDAY 5: Kroger-Albertsons Merger Falls Apart; Introducing the Retailer of the Year

1. Kroger-Albertsons Merger Falls Apart

Following injunctions from both the U.S. District Court in Oregon and the King County Superior Court for the State of Washington this week, what would have been the largest grocery merger in history between The Kroger Co. and Albertsons Cos. has fallen apart. 

Both companies have moved to terminate the $24.6 billion merger agreement, with Albertsons filing a lawsuit against Kroger in the Delaware Court of Chancery, claiming Kroger’s willful breach of contract and breach of the covenant of good faith and fair dealing since the company failed to exercise “best efforts” and to take “any and all actions” to secure regulatory approval of the companies’ agreed merger transaction. 

“A successful merger between Albertsons and Kroger would have delivered meaningful benefits for America's consumers, Kroger’s and Albertsons’ associates, and communities across the country,” said Tom Moriarty, Albertsons’ general counsel and chief policy officer. “Rather than fulfill its contractual obligations to ensure that the merger succeeded, Kroger acted in its own financial self-interest, repeatedly providing insufficient divestiture proposals that ignored regulators’ concerns.”

Kroger, which calls Albertsons’ claims baseless and without merit, said it “went to extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process and the facts will make that abundantly clear. We are incredibly proud of the Kroger team for how they worked through the merger process with the highest degree of integrity and commitment."  

Both companies have asserted that they are in good financial standing as they begin their next chapters separately. For its part, Kroger’s board of directors has approved a new share repurchase program following a two-year pause, authorizing the repurchase of up to $7.5 billion of common stock. 

2. Another Proposed Mega-Merger Could Take Shape

While the Kroger-Albertsons merger will never see the light of day, readers were interested in the possibility of a merger between Mondelēz International, Inc. and The Hershey Co. According to reports, Chicago-based Mondelēz has approached Hershey about a possible merger, with the former exploring a business combination that could lead to a mega-company with potential sales of $50 billion. 

Any approach by Mondelēz won’t be an easy sell, however, given The Hershey Trust that is in place. Set up to advance the legacy of founder Milton Hershey and his wife, Catherine, the Trust maintains a majority stake in the namesake business and reportedly holds 80% of the company’s voting power. Whether or not The Hershey Trust is open to even tentative talks, the company has a history of rejecting mergers. In 2016, Hershey nixed a previous offer by Mondelēz.

3. PG Reveals Its Retailer of the Year

Readers this week were also interested in PG Editorial Director and Associate Publisher Gina Acosta’s deep dive into our 2024 Retailer of the Year – Sprouts Farmers Market. According to Acosta, the grocer can’t seem to open stores fast enough as it attracts scores of young families and consumers hungry for a simplified yet curated shopping experience that offers the right products at the right time and price, with a big focus on fresh.

“Sprouts Farmers Market is honored to receive Progressive Grocer’s Retailer of the Year award, a reflection of the dedicated people, culture and values that define our organization,” said CEO Jack Sinclair. “This achievement would not be possible without the commitment of our more than 33,000 team members across the country, who work tirelessly to care for our customers and deliver an exceptional shopping experience every day.  As we expand to new markets across the country, we will stay true to our roots of fresh produce and healthier products that inspire our customers to live and eat better and enrich the communities we serve.”

4. New Stores Ahead for Trader Joe’s, Wegmans

A pair of new stores and a pair of new tote bags have made news for Trader Joe’s. The newest Trader Joe’s welcomed shoppers on Dec. 6 in Vista, Calif., near San Diego, and a few days before, shoppers in Milwaukie, Ore., got to check out their new TJ’s outpost.

In addition to the new stores, shoppers around the country are looking for the grocer’s newest reusable totes. On the heels of this year’s mini and canvas bags that went viral online and sold out quickly, these bags are in demand for holiday grocery shopping jaunts and as gifts. The stand-up collapsible totes feature both top and side handles for easy transport and are available in two colorful designs. 

Meanwhile, Wegmans revealed that its latest store opening will happen on New York’s Long Island early next year. The 101,000-square-foot supermarket will be the grocer’s first on Long Island and will employ more than 500 associates in full- and part-time roles. 

5. Meijer Makes Delivery Moves

News came in this week that Midwest retailer Meijer has expanded its home delivery service area, tripling its range from an approximately 20-minute radius from its stores to 60 minutes. The extended delivery zone makes the service available to nearly 4 million additional households in rural and urban areas across the Midwest, with items delivered in as little as three hours.

"We heard from many customers that were interested in using home delivery to make their grocery shopping more convenient but couldn't because they were outside of the delivery range," said Emily Henao, VP of digital experience at Meijer. "We know our customers are busier than ever, and this expansion gives us a unique opportunity to make their lives easier."