Shaw’s on 27 East Ave. in Lewiston in November 2023. Daryn Slover/Sun Journal file

The future of 19 Shaw’s supermarkets in Maine remains unclear as a proposed $24.6 billion merger of Kroger and Albertsons, two of the nation’s supermarket giants, moves through its final review by federal regulators.

None of more than 5,500 supermarkets related to the merger is targeted for closure, but company executives aren’t saying exactly what the impact will be on the 127 Shaw’s stores across New England that Albertsons owns.

With the takeover set to happen as soon as Jan. 13, Kroger Co. certified to the Federal Trade Commission on Nov. 15 that its merger with Albertsons will comply with antitrust rules meant to preserve competition. But industry watchdogs and others say it will be bad for employees and consumers as it threatens to further diminish a dwindling number of independent grocers and expand food insecurity in communities with struggling stores.

The merger comes as Maine’s supermarket landscape continues to diversify, with the opening last month of the state’s first Costco in Scarborough, and further growth and consolidation among Shaw’s, Hannaford, Market Basket, Target, Walmart, and independent grocers across the state.

Albertsons says it will only bring good things to Shaw’s stores, customers, employees, and the communities they serve.

“We do not expect the Shaw’s locations in Maine to change as a result of the Kroger-Albertsons merger,” a statement from the company said. “Kroger’s merger with Albertsons will mean long-term job security, higher wages, expanded benefits, and a strong unionized workforce for associates. The merger will also mean lower prices more choices for fresh food for customers, and more investments in our communities.”

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Neither Albertsons nor Kroger answered specific questions about the deal, including whether Shaw’s stores will be renamed or rebranded if the merger goes through. Giving up Shaw’s banner in Maine would forfeit name recognition and brand loyalty that date to the company’s founding in Portland in 1860, although a name change might not faze some customers.

“I don’t know that the name would make much difference to me, especially if it’s owned by a big national company and not locally owned,” said Jennifer Hamilton, of South Portland, a regular shopper at the Mill Creek Shaw’s.

Employees at the Mill Creek Shaw’s declined to be interviewed for this story, but a worker at a Hannaford a few streets away said Kroger representatives walked through that store last week, apparently checking out the competition.

Cincinnati-based Kroger is the nation’s largest supermarket operator, with about 500,000 associates among 2,750 stores in 35 states, including the Ralphs, Dillons, and Harris Teeter chains. Albertsons, headquartered in Boise, Idaho, is the second largest, with about 290,000 associates among 2,272 stores in 34 states, including the Star Market, Safeway, and Vons chains.

Kroger and Albertsons announced their merger plan in October 2022, saying it is necessary to compete with major interlopers, including Amazon and Walmart. Kroger bid $20 billion for Albertsons’ holdings and agreed to cover an additional $4.7 billion of Albertsons’ debt.

Joseph Welsh, a supermarket expert with 45 years of experience in the aisles, calls that $4.7 billion “go-along money,” which he says Kroger agreed to pay so Albertsons would go along with a deal that will devastate an industry that’s already flailing.

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“I’m against the merger,” Welsh said. “The people who always get shafted in these situations are the poor kids.”

Mary Martin, 79, of South Portland loads groceries into her car after shopping at Shaw’s in South Portland. Derek Davis/Staff Photographer

Welsh predicted that marginal or struggling stores will close and communities that are already “food deserts” or lack access to healthy food options will become more food insecure. In rural areas like Maine, he said, independent grocers will struggle to stay open and people will have to drive farther to buy food if they close.

“If the Federal Trade Commission even considers this, it will be an insult to all of us,” he said.

In an effort to satisfy federal regulators, Kroger and Albertsons announced in September that they will sell 413 stores, eight distribution centers, two offices and other assets for about $1.9 billion to C&S Wholesale Grocers, which supplies more than 7,500 food sellers, including over 500 independent Piggly Wiggly grocery stores.

The merger agreement has a closing date of Jan. 13, 2024, but it can be extended every 30 days into next October.

BIG-BOX COMPETITION

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Meanwhile, Maine’s supermarket scene includes increasing big-box competition and independent upstarts. In addition to the state’s first Costco opening last month, a second Hannaford opened in Scarborough in October, in a former Shaw’s building, one of two Shaw’s that closed recently in the Portland area. Founded in Portland in 1883, Hannaford now has 66 stores in Maine, with 187 across New England and New York.

Massachusetts-based Market Basket is building a third Maine location in Topsham, following its first in Biddeford in 2013 and second in Westbrook in 2020. There’s a sprinkling of Walmarts and Targets offering groceries across the state, including a Target that opened in July in Auburn in a former Kmart building.

In South Portland, Smaha’s Legion Square Market closed this year and was replaced by Barber Brothers Meat & Provisions. And Gowell’s Shop ‘n Save, which operates two central Maine stores that are supplied by Hannaford, completely renovated and expanded its Greene location this year.

A website dedicated to the Kroger-Albertsons merger says that “Kroger will not close any stores, distribution centers or manufacturing facilities or lay off any front-line associates as a result of the merger.”

The website also says Kroger will invest $500 million “to lower prices,” $1.3 billion “into Albertsons Cos. stores to enhance customer experience,” and about $1 billion “to continue raising associate wages and industry-leading, comprehensive benefits.” Again, how these investments will affect Shaw’s stores remains to be seen.

Regarding employee relations, the merger website says “Kroger is proud to operate unionized grocery stores” and will be “securing the long-term future of union jobs.” However, unions have opposed the takeover, saying the companies have made vague promises without putting concrete terms in their contracts.

Whatever happens with the merger in the coming months, Mary Martin, 79, doesn’t want anything to change at the Mill Creek Shaw’s, where the South Portland resident has shopped for decades.

She noted the recent addition of self-checkout lines and admits it could benefit from renovations that have happened at other Shaw’s stores, but she’s content with it as it is.

“I wouldn’t trade Shaw’s for another supermarket,” she said. “I really don’t care if it’s updated, as long as it’s clean. I’m not living there.”

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