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Albertsons Considers Merger With Sprouts

Randalls grocery in Houston

Albertsons Cos., owned and operated by Cerberus Capital Management, entered preliminary merger talks with Sprouts Farmers Market, Bloomberg reports. Sources said the discussions are at an early stage and may not lead to a deal. A merger would take Sprouts private, joining Albertsons' portfolio, which includes Houston-based Randalls and California-based Safeway. 

Sprouts has struggled recently. Last September, Sprouts CEO Amin Maredia said price cuts were not sustainable and his stores had been exposed a bit by lower prices at larger stores. Conventional grocers have dramatically increased their organic food offerings in response to changing preferences, putting pressure on operations like Sprouts, The Fresh Market and Whole Foods.