Jewel, Mariano’s could join forces on possible Kroger-Albertsons merger.

Kroger, the largest traditional grocery chain in the United States, is in talks to acquire Albertsons, which has created about 5,000 stores and a giant supermarket with more than $200 billion in annual sales. Like Chicago, where rival chains Jewel and Mariano’s can fit into the same corporate basket. Headquartered in Boise, Idaho, Albertsons operates more than 2,200 supermarkets in 34 states, including 188 jewelry stores in the Chicago area. “The regulatory aspect is a very real issue,” said Zain Akbari, an equity analyst for Chicago-based Morningstar’s grocery industry, according to industry analysts. “In Chicago, both Albertsons and Kroger maintain significant presence through Jewel and Mariano’s. And that story is repeated in many other markets across the country.” Pickup clerk Jordyn Jenkins collects groceries on Thursday, August 1. January 18, 2022 in Mariano’s Bucktown. (Brian Cassella / Chicago Tribune) Neither Kroger nor Albertsons responded to a request for comment Thursday. Bloomberg reported Thursday morning that a deal could close this week, citing people familiar with the matter. But the rise of Walmart and Amazon as major players with thin margins and growth in both brick-and-mortar and online segments could be behind the urge to merge Kroger and Albertsons, Akbari said. Grocery markets, especially local markets,” said Akbari. “The food industry has very, very narrow margins, and any savings that can be made are beneficial because the industry has always been competitively priced.” A potential merger would unite one of the oldest Chicago grocery chains. Founded in 1899 as Jewel Tea, a horse-drawn delivery service selling tea and coffee, Jewel has grown into Chicago’s largest grocery chain with 188 stores in the city and suburbs. In 2013, Jewel was sold to Cerberus Capital Management as part of a $3.3 billion acquisition that also included the now public Albertsons grocery chain. Mariano’s was launched in 2010 by former Dominick executive Bob Mariano. The chain has grown rapidly after the death of Dominick’s, a venerable Chicago grocery store in 2013. Dominick’s closed its parent company Safeway. In 2015, hypermarket Kroger bought Mariano’s parent company, Milwaukee-based Roundy’s, for $800 million.[ Dominick’s: From a corner grocery to a Chicago institution ]Last year, Mariano opened a new small grocery store, Dom’s Kitchen & Market, in Lincoln Park, and will open a second store in Old Town next month. Meanwhile, the chain that bears his name remains a major part of the Chicago grocery market, led by Kroger. But it found its way back in 1998 when it acquired Food 4 Less, a mid-size discount chain based in California. There are currently 104 stores in Illinois under the Kroger, Mariano’s and Food 4 Less banners. Kroger is expected to generate nearly $150 billion in revenue this fiscal year, with a market cap of nearly $33 billion, Akbari said. Albertsons is expected to generate revenue of $76 billion in 2022, with a market cap of nearly $14 billion. Albertsons shares were up 11.5% on Thursday’s merger speculation, while Kroger was up about 1%. Akbari said Kroger was “much above.” Analytics, private label offerings, and other traditional grocery stores with digital capabilities. He said the Albertsons “lagged behind” in every way. For Kroger, the deal will help expand its footprint, digital capabilities and capitalize on costs. Albertsons’ backers, including its largest shareholder Cerberus Capital with a 28.5% stake, will be able to shop the grocery chain this year, find cash, and there is. Akbari said, “Kroger will potentially add thousands of brick-and-mortar grocery stores, but the main focus of the merger could be on a growing digital marketplace. The pandemic has triggered a major shift towards online grocery shopping, with retailers nationwide’ According to company Insider Intelligence, it surpassed $121 billion, at 55.6% in 2020 and 11.3% last year, according to Insider Intelligence. It is expected to account for nearly 14% of the $212 billion or $1.5 trillion U.S. retail grocery market, with large retailers accounting for nearly 28% of online grocery sales, according to Insider Intelligence. It has a 21% share through Whole Foods stores, about 10% Kroger and less than 4% Albertsons owns less than 4% of the online grocery market, but Blake Droesch, retail and e-commerce analyst at Insider Intelligence, said They said they could increase their share: “Kroger will continue to grow digitally by leveraging its Albertsons location as a fulfillment center to drive sales, while Albertsons will have access to this delivery infrastructure,” said Chicago shoppers. Here are some other changes to see: Akbari said Kroger’s own branded brands, including Private Selection, Kroger, and Simple Truth, which are surging from Mariano’s, will likely show up at Jewel after the merger. or will continue to operate as a separate banner, but even if regulators do not require the sale, Akbari will have Jewel and Mariano If they share the same owners, we expect a downsizing of the Chicago portfolio. Some of the select stores in the area,” said Akbari. “If you add gems to Mariano’s, it’s probably going to be too dense.” rchannick@chicagotribune.com
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