Kroger is preparing to close 60 stores, about 5% of its supermarket locations, within 18 months to save money and streamline operations.
The closures were revealed in the grocery giant’s first-quarter earnings report on Friday. The move is expected to provide a “modest financial benefit” in the long term, the report states.
“Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance,” the company said in the filing.
The announcement comes six months after Kroger’s plans to merge with Albertsons collapsed, leading to an ongoing legal battle. Albertsons sued Kroger for allegedly breaching the merger contract, claiming its rival did not do enough to get the merger approved. Kroger filed a countersuit in March.
Both companies are seeking to claw back damages to make up for the failed $24.6 billion merger that was blocked by federal and state courts. Regulators and courts halted the merger because it was anticompetitive, meaning competition would be reduced, leading to fewer choices for consumers and possibly higher grocery prices.
If approved, the acquisition would have been the largest supermarket merger in U.S. history.
Kroger did not disclose in the filing which locations will close in the next 18 months. However, local media outlets reported that a number of locations have either already closed or are soon to be closed.
Some stores seemingly affected by the closures, according to reports, are based in Dickinson, Texas; Gassaway, West Virginia; and Charlottesville, Virginia. On Monday, Kroger confirmed that four Atlanta, Georgia, locations will be shuttered by fall this year.
“This closure is part of a larger company-wide decision to run more efficiently and ensure the long-term health of our business,” a Kroger Atlanta spokesperson told a local Fox outlet.
All affected employees will be offered positions at nearby stores in light of the closures, Kroger said.
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Kroger has about 1,200 remaining stores across 16 states, including Alabama, Illinois, Louisiana, and South Carolina.
Following the release of its earnings report on Friday, Kroger’s stock increased 10%.