The giant grocer is reviewing strategic options for its $4 billion convenience division.
Kroger Co. has announced its intention to explore strategic alternatives for its convenience store business, including a potential sale, as part of its Restock Kroger plan. This is the result of a review of assets that are potentially of more value outside of the company than as part of Kroger.
“Our convenience stores are strong, successful and growing with the potential to grow even more,” said J. Michael Scholtman, executive vice president and chief financial officer, in a prepared statement. “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.”
Kroger’s convenience store business includes 784 c-stores located across 18 states. It includes 68 franchise operations. The stores employ 11,000 associates and operate under the following banner names: Turkey Hill Minit Markets, Loaf ‘N Jug, KwikShop, Tom Thumb and QuickStop. Neither supermarket fuel centers nor Turkey Hill Dairy is included in this review.
Kroger’s convenience store business generated revenue of $4 billion, including selling 1.2 billion gallons of fuel, in 2016. The business unit has delivered 62 consecutive quarters of identical store sales growth.
“Our convenience store management and associates are an important part of our success. They put our customer first every day. We value what they do and thank them for what they will continue to do as we conduct this evaluation,” said Schlotman.
The Cincinnati-based company has hired Goldman Sachs & Co. to identify, review and evaluate the options.
Among its holdings, Kroger operates 2,793 retail food stores under a variety of local banner names in 35 states and the District of Columbia.