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This looks like a replay of the Albertsons/Safeway merger, with way more stores being sold off to a company unaccustomed to the sort of volume that would make the deal work:

C&S Wholesale Grocers, a supplier to independent grocery stores and owner of a retail pharmacy and 23 supermarkets under the Piggly Wiggly and Grand Union banners, has agreed to acquire a total of 579 stores in a revised divestiture deal worth $2.9 billion.

So the new C&S would be 25 times its current store footprint. Wholesale experience could mitigate that to some extent, but just ask Haggen how suddenly growing by an order of magnitude worked out. The story covers the Washington-state chain completely devoid of context:

In addition, Kroger will sell its Haggen banner to C&S, and C&S will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado.

Again, this is a repeat of what the last merger did in Oregon and Washington, except this time it ropes four additional states into the problem. And, if history is any sort of barometer, there will be systemic failures on the part of C&S that result in the merged behemoth buying back the divested stores for a pittance, creating the same problems they're claiming the new plan will solve.

With an additional hitch: As a wholesale distributor to 7,500 competing independent grocery stores, there's no reason to believe that relationship will survive as a new direct competitor.

Edited because I did some research and had a major error. C&S does operate retail locations well west of the Mississippi.