CA Grocery Giant Announces Closures: What To Know

Grocery giant Kroger announced plans to scale back on brick-and-mortar locations this year, with roughly 60 stores set to close over the next 18 months.

In Kroger's first quarter earnings report, which was released on Friday, the nation's second-largest grocery chain behind Walmart said it recognized an impairment charge of $100 million related to the planned store closings. The company expects a "modest financial benefit" after the closures, the company said.

"Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance. Kroger will offer roles in other stores to all associates currently employed at affected stores," the company said in a statement.

Kroger said the company expects to earn an operating profit of between $4.7 billion and $4.9 billion this year.

It's not yet clear which 60 locations are expected to close. In recent years, the grocery chain's stores have shuttered in cities such as Long Beach and Los Angeles.

Currently, there are 182 Kroger-owned Ralphs and 90 Food 4 Less locations in California, with both chains headquartered in Compton.

SEE ALSO: Grocery Strike Looms As SoCal's Biggest Supermarket Unions OK Work Stoppage

The announcement comes at a time when Kroger is facing the possibility of a major labor strike in California. Workers authorized a strike earlier this month, accusing the company of union-busting, intimidation and dismissing their proposals.

Still, whether more than 45,000 workers will walk off the job is dependent on the outcome of ongoing negotiations, including a meeting this week.

The expected closures also come nearly six months after the controversial proposed merger with Kroger competitor, Albertsons, was blocked in court. The rulings were celebrated as a "major win" by the Federal Trade Commission — which, together with several states — asked the federal court to stop the merger.

Federal regulators said the merger would have eliminated competition and resulted in higher prices for consumers and bad outcomes for workers.

The $24.6 billion merger was abandoned, and both companies turned to suing each other to recoup the damages.

“Rather than fulfill its contractual obligations to ensure that the merger succeeded, Kroger acted in its own financial self-interest, repeatedly providing insufficient divestiture proposals that ignored regulators’ concerns,” Albertsons General Counsel and Chief Policy Officer Tom Moriarty said in a news release.

Kroger, in response, called Albertsons’ claims “baseless and without merit.”

“This is clearly an attempt to deflect responsibility following Kroger's written notification of Albertsons' multiple breaches of the agreement, and to seek payment of the merger's break fee, to which they are not entitled,” the company said in a prepared statement.

Kroger, which is based in Cincinnati, operates 1,239 grocery stores in 16 states and owns many well-known regional chains, including Ralphs, QFC, Fred Meyer and Food 4 Less.

Los Angeles Editor Chris Lindahl contributed to this report.