KROGER BUYS SHOPPING PLAZA ACROSS FROM A PUBLIX
DELRAY BEACH — The nation’s largest supermarket chain appears to be pushing into the backyard of Florida’s largest grocer, raising the specter of another deep-pocketed rival trying to take business from Publix.
Cincinnati-based K roger (NYSE: KR) paid $15 million for the 74,000-square-foot shopping center at 5024 W. Atlantic Ave. in Delray Beach, according to a deed made public this week. Kroger also paid $2 million for an outparcel that includes a bank branch.
The buyer is Topvalco, an entity that shares a Cincinnati address with Kroger. Topvalco’s president is Nick Hodge, Kroger’s director of corporate real estate.
Kroger’s new acquisition is at the southwest corner of Military Trail and Atlantic Avenue. Publix has a store at the northeast corner of the intersection.
In a twist, Kroger is buying the property not for itself but for Lucky’s, the organic grocer based in Colorado. The new 29,000-square-foot location is expected to open in 2019, said Lucky ’s spokeswoman Krista Torvik.
K roger in 2016 announced a “strategic partnership” with Lucky’s, an organic grocer based in Colorado. Lucky’s has been expanding in Florida.
Kroger operates in 35 states, but Florida isn’t on the list.
One supermarket expert said Publix has such a huge head start in Florida that Kroger won’t make much headway.
“It would be a bad move,” said David Livingston, an analyst based
in Michigan. “Publix is too strong.”
However, the Lucky’ s expansion makes more sense, he said.
In other parts of the country, Kroger and Publix are battling for market share. In Palm Beach County, however, Publix has emerged as the dominant grocer by far, with 75 supermarkets, far ahead of Winn-Dixie, Whole Foods and Trader Joe’s.
Publix reported sales of $34.6 billion for 2017 and a profit margin of 6.6 percent — an unusually high figure for a player in the notoriously low-margin grocery business.
By contrast, grocery giant Kroger showed $123 billion in revenues but a margin of just 1.6 percent in 2017. Unlike Publix, which has a comfortable lead in its main market, Kroger is waging supermarket wars in parts of the country.
Also unlike Publix, Kroger sells gas, a notoriously unprofitable endeavor. Kro- ger uses discounted gas to lure shoppers.
In another sign of increased grocery competition, Amazon and Whole Foods last week launched delivery in parts of Palm Beach County.
Kroger operated in Florida in the 1980s under the Florida Choice name, but Kroger sold its Sunshine State stores in 1988.
Publix has moved strongly to block out rivals by blanketing Palm Beach County with supermarkets.
The new Publix at 500 Belvedere Road in West Palm Beach is just a mile from the Pu bl ix at 828 Southern Blvd., two miles from the Publix at CityPlace, three miles from the Publix in Palm Beach, four miles from the Publix on Village Boulevard and five miles from a Publix on Military Trail.
The Publix under construction at the Plaza del Mar in Manalapan is only two miles from the Publix at 1589 W. Lantana Road in Lantana.