Kroger explores possible sale, spinoff of convenience stores
Supermarket chain maintains it wants to consider all options
CINCINNATI Kroger is shopping its convenience store operations as the company hunkers down for a battle with Amazon and Walmart in its mainstay grocery business.
The Cincinnati-based supermarket chain disclosed “its intention to explore strategic alternatives” (corporate speak for “it’s up for sale”) for 784 convenience stores located across 18 states.
Another possibility: spinning off the operation as a stand-alone company.
Kroger’s convenience store brands are: Turkey Hill Minit Markets, Loaf ’N Jug, KwikShop, Tom Thumb and QuickStop.
“Our convenience stores are strong, successful and growing with the potential to grow even more,” Chief Financial Officer Mike Schlotman said.
“We want to look at all options to ensure this part of the business is meeting its full potential. Considering the current premium multiples for convenience stores, we feel it is our obligation as a management team to undertake this review.”
The convenience store operations generated revenue of $1.4 billion and sold 1.2 billion gallons of fuel for Kroger in 2016. The stores employ 11,000 associates.
Neither supermarket fuel centers nor Turkey Hill Dairy are included in this review.
The company has hired Goldman Sachs & Co. to identify, review and evaluate its options.
Kroger says its convenience stores, such as this Turkey Hill Minit Market in Indianapolis, “are strong, successful and growing.”