Kroger and Albertsons announced September 11 they had agreed to sell 413 stores and additional assets for about $1.9 billion, in connection with their proposed merger. Meanwhile, Kroger said it achieved meaningful operational efficiencies in the supply chain in the second quarter of 2023, according to Retail Info Systems.

The agreement with C&S Wholesale Grocers, LLC includes the sale of stores —  including the Mariano's, QFC, and Carrs brand names — eight distribution centers, two offices and five private label brands (Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals, and Waterfront Bistro) across 17 states and Washington, D.C.

According to Kroger, the divestiture plan marks a key next step toward the completion of the proposed merger by extending a well-capitalized competitor into new geographies. The plan aims to ensure no stores will close as a result of the merger and that all frontline associates will remain employed.

Supply Chain Efficiencies

In Kroger’s Q2 2023 the retailer achieved “meaningful operational efficiencies” in its supply chain through improved transport capacity utilization and increased productivity in its warehouses and across its network, Gary Millerchip, Kroger’s SVP and CFO told analysts in its recent earnings call.

The grocer will continue to invest in its supply chain, he noted, as the company sees significant opportunities to further lower costs, while improving product freshness by eliminating waste.

He later added that Kroger can continue to drive efficiency in its supply chain strategy by leveraging data more effectively, technology, and continuing to optimize routes and the capacity it’s utilizing on those routes.