Latest Decision Delays Sale and Possible Closure of Local Shopping Hub
Rick Langenberg
In a decision that many are declaring as a big win for local grocery shoppers in Woodland Park, Safeway stores, including a popular local outlet in the east section of town, have received a temporary reprieve from any forthcoming sales action or even a possible closure down the road.
With this legal development, the complex issue surrounding a proposed $25 billion merger between Kroger and Albertsons won’t get resolved until later this fall, at the earliest. That’s when the entire lawsuit, filed by the state against the proposed merger action, will play out in court. The opening day for the trial is slated for Sept. 30.
In a definite temporary win for Safeway, whose stores are owned by Albertsons, a Colorado judge recently issued an order temporary blocking the merger and overall deal.
At a hearing in July in Denver, Judge Andrew Luxen granted a preliminary injunction halting the deal and canceling a hearing set for mid-August. He concluded that any current proposed transactions needed to wait until the entire case is decided on.
That’s good news for the Safeway store in Woodland Park, and for its customers and employees. The Safeway store was one of nearly 100 Albertsons outlets in Colorado, slated to get sold to C&S Wholesale Grocers, based in New Hampshire. This was part of an attempt by proponents of the merger to sweeten their negotiating hand more to move the merger through. Besides the state of Colorado, the deal has also generated scrutiny by the Federal Trade Commission (FTC). By selling a number of properties, merger proponents believed this could help move the deal along.
Proponents of the merger favor the proposed $25 billion plan so their companies can better compete against the rise of supermarkets and online shopping giants, such as Walmart and Amazon.
But the merger has faced much legal opposition in Colorado. Colorado Attorney General Phil Weiser helped bring this issue to the forefront and played a major role in the state’s lawsuit and attempt to block the merger. Weiser expressed much elation over the recent ruling by Judge Luxen.
“I am pleased that Kroger and Albertsons agreed to halt their plans to merge until the court rules on the state’s lawsuit to permanently block the grocery merger,” said the attorney general in a public statement. “This is great news for shoppers, workers, farmers and other suppliers, who can rest assured that this megamerger will not go into effect during harvest season and while kids are headed back to school.”
The crux of Weiser’s opposition to the deal has focused on the impact of this merger for local communities in Colorado. More specifically, will the merger lead to the shutdown of more grocery stores and the loss of many employees? This is one of the main questions raised by critics of the merger.
Weiser did an earlier listening tour statewide throughout many impacted communities, including Woodland Park.
Weiser got an earful and eventually decided to publicly oppose the merger. Most people attending the meetings expressed big concerns about the merger and the probable impacts. Speculation mounted that Woodland Park could lose one of their prime grocery store outlets.
And if Safeway was forced to shut down, many also feared this could have disastrous consequences locally for a prime shopping center. Woodland Park’s Safeway is the anchor site of one of the town’s main shopping hubs.
If the merger plans move forward, then C&S Wholesale Grocers would become the eventual new owner. That company, though, has no experience in operating a retail footprint in the state.
This is another question that has been added to the mix.
The merger, though, has its supporters across the nation. A spokesperson for Albertsons indicated that they have no problem with the recent decision by Judge Luxen, and don’t view this verdict as a victory for opponents of their merger proposal. “We look forward to defending in court how the combination of Kroger and Albertsons will provide meaningful, measurable benefits including lower prices and more choices for families across the country and more opportunities for stable well-paying union jobs, stated a Kroger spokesperson, according to an article in The (Colorado Springs) Gazette.
This view is not shared by Weiser and many current groceries’ operators. Colorado became the second state to try to block the merger, following action taken by the state of Washington. In addition, the FTC filed a related suit.
Critics of the merger have said that the companies combing would create a monopoly on Colorado’s grocery store industry
When the news first struck that two of the country’s biggest grocery store chains would be merging together government officials, union leaders and grocery store employees cried foul.
Colorado was one of the first states to file their own lawsuit against the merger saying that the merger could negatively affect Colorado more than other states. Across the state, Safeway and King Soopers (or City Market) are the two major grocery store operators.
Before Colorado Attorney General Phil Weiser filed the state’s lawsuit, he held town hall meeting in communities across the state where the merger would impact, such as Woodland Park. These forums were well-attended.
