Is the Kroger Company in position for an acquisition in 2017?

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storewanderer
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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by storewanderer » October 4th, 2017, 10:25 pm

I agree that the holdings of Ahold in the US would not fit Kroger too well (though I think Hannaford and Giant-PA may actually be okay fits, but not great fits). Giant-MD, Food Lion, and whatever they operate with the fruit bowl logo up in the northeast are all awful fits for Kroger.

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by pseudo3d » October 5th, 2017, 7:28 am

architect wrote:
October 3rd, 2017, 8:36 pm
This is just speculation at this point, but Kroger's stock price jumped today following rumors that the company could be acquired by Ahold Delhaize. Although such a merger would be a disaster operationally (Kroger decentralized operations likely would not mesh well with the one size fits all model of Ahold), at least the combined company would have almost complete nationwide coverage and be able to achieve cost synergies from larger buying power. With Kroger's stock price in an extended slump, it will be interesting to see if another buyer could emerge even if this potential Ahold deal falls through.

https://www.bizjournals.com/cincinnati/ ... umors.html
I would think that Ahold Delhaize would be acquired by Kroger (at least the American operations, anyway), not the other way around. The Northeast is Kroger's last unknown frontier and Ahold Delhaize didn't seem to merge for the American side benefit (again, remember that the U.S. subsidiaries of Ahold and Delhaize didn't actually merge, nor have they done any conversions). For a merger to work with Ahold Delhaize being the parent company, they would have to dissolve the existing Ahold and Delhaize companies in the U.S. and then just run Kroger as the operational unit. But again, it would be a massive billion-dollar type deal and I just don't think Ahold Delhaize is interested in the American market that much.
arizonaguy wrote:
October 4th, 2017, 8:21 am
If Albertsons was going to be sold in pieces before the Roundy's purchase I thought Kroger should've purchased Jewel - Osco. Chicagoland isn't as high cost as other markets and they'd own the dominant chain (adjacant to their very large operations in Indiana, Ohio, Michigan, southern Illinois, etc.
Kroger also missed multiple opportunities to take Dominick's back when Safeway was ready to give up on it (even before the very end). Dominick's would have been a pretty good purchase--a solid running in market share with its own distribution center.
storewanderer wrote:
October 4th, 2017, 10:25 pm
I agree that the holdings of Ahold in the US would not fit Kroger too well (though I think Hannaford and Giant-PA may actually be okay fits, but not great fits). Giant-MD, Food Lion, and whatever they operate with the fruit bowl logo up in the northeast are all awful fits for Kroger.
Food Lion would probably be divested too since it runs against Kroger in a lot of the East Coast markets going south. I don't think the "fruit bowl" stores would be terrible fits for Kroger since they have good market share and (fairly) modern stores, but the only reason why Kroger would want to go in is just expanding the base, and it would take a lot of capex just to "Krogerize" the stores into the rest of the chain.

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by rwsandiego » October 5th, 2017, 11:09 pm

arizonaguy wrote:
October 4th, 2017, 8:21 am
If Albertsons was going to be sold in pieces before the Roundy's purchase I thought Kroger should've purchased Jewel - Osco. Chicagoland isn't as high cost as other markets and they'd own the dominant chain (adjacant to their very large operations in Indiana, Ohio, Michigan, southern Illinois, etc.
I think Jewel-Osco would have been a very good fit for Kroger. Alas, Albertsons was not sold in pieces, so that never happened.

pseudo3d wrote:
October 5th, 2017, 7:28 am


Kroger also missed multiple opportunities to take Dominick's back when Safeway was ready to give up on it (even before the very end). Dominick's would have been a pretty good purchase--a solid running in market share with its own distribution center.
I also agree that Dominick's would have been a good fit, but Kroger would have had a lot of work ahead of it to win back customers. Conversely, no such work would have been required at Jewel because they still have a loyal customer base and a substantial market share.

Here's a fun fact: Had Kroger bought Dominick's, it would have re-acquired the distribution center it sold to Dominicks back in 1970 when it exited Chicago and at least a couple of locations that it sold to Dominick's. Come to think of it, at least one Mariano's is located in a Dominick's that traces its roots back to Kroger - the store at Higgins and Cumberland in Park Ridge.

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by wnetmacman » October 6th, 2017, 6:57 am

As a general rule, Kroger doesn't go after anyone it doesn't believe it can make #1 or #2 in its respective markets. Dominick's wouldn't have fit that bill, while Jewel would have by far. Albertsons wouldn't have let their crown 'Jewel' go, however. The only way that would have happened was for Kroger to buy New Albertsons, Inc. before Albertsons LLC bought them back. That didn't happen.

I could see them going after the Giants, Hannaford and Stop and Shop, but there is just far too much overlap between Kroger's eastern front and the old, tired Food Lion stores.

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by rwsandiego » October 6th, 2017, 6:00 pm

wnetmacman wrote:
October 6th, 2017, 6:57 am
As a general rule, Kroger doesn't go after anyone it doesn't believe it can make #1 or #2 in its respective markets. Dominick's wouldn't have fit that bill, while Jewel would have by far....
Dominick's was #2, but a very distant one. Nonetheless, I know what you mean. I think Kroger could have fixed the damage that was done by Safeway with very little effort and regained the lost customers and reputation. All they would have to have done was hired Bob Mariano from Roundy's and let him go to work. :) However, it would have been a huge financial gamble for them and I can't blame them for not taking it.

I also agree that Albertson's would not have sold Jewel unless they were very desperate for cash or were in wind-down mode. Still, it would have been interesting to see what would happen.

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by rwsandiego » October 6th, 2017, 8:48 pm

rwsandiego wrote:
October 5th, 2017, 11:09 pm
...Here's a fun fact: Had Kroger bought Dominick's, it would have re-acquired the distribution center it sold to Dominicks back in 1970 when it exited Chicago and at least a couple of locations that it sold to Dominick's. Come to think of it, at least one Mariano's is located in a Dominick's that traces its roots back to Kroger - the store at Higgins and Cumberland in Park Ridge.
I located a list of stores Dominick's acquired from Kroger in 1970. Here are the locations which are currently Mariano's:
  • 15 Garden Market, Western Springs (Mariano's website lists a Gilbert Ave address, but a Google search of 15 Garden Market showed the Mariano's
  • 1900 s Cumberland, Park Ridge (mentioned above)
  • 3020 Broadway, Chicago (Dominick's address was3012, but the property is the same; the Dominick's store burned and the land sat vacant until Mariano's built)

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by storewanderer » October 8th, 2017, 11:34 am

I think Kroger was very close to buying Dominicks a decade ago but there was some kind of fall through. I may be wrong but I think it had something to do with the warehouse, and possibly the union, or so the rumor went.

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by pseudo3d » October 9th, 2017, 6:42 am

rwsandiego wrote:
October 6th, 2017, 6:00 pm

I also agree that Albertson's would not have sold Jewel unless they were very desperate for cash or were in wind-down mode. Still, it would have been interesting to see what would happen.
Selling NAI to anyone else but Albertsons LLC would've been difficult. It would've added Shaw's and ACME to the package, but the Albertsons in the West Coast (not to mention all that debt) would've been a deal-breaker for Kroger. I'm sure Kroger had looked at NAI when it was up for sale, though.

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by SamSpade » March 8th, 2018, 6:21 pm

Kroger's 4th Quarter returned to their previous quarterly gains in same-store sales and appears to be well positioned, despite the rather negative tone of this article:
https://www.reuters.com/article/us-krog ... SKCN1GK1PG

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Re: Is the Kroger Company in position for an acquisition in 2017?

Post by storewanderer » March 8th, 2018, 7:10 pm

SamSpade wrote:
March 8th, 2018, 6:21 pm
Kroger's 4th Quarter returned to their previous quarterly gains in same-store sales and appears to be well positioned, despite the rather negative tone of this article:
https://www.reuters.com/article/us-krog ... SKCN1GK1PG
We will see what happens. I think Kroger has lost its way. Out of stocks are a big problem and the quality of their fresh departments seems to be going downhill, especially produce. Programs that Kroger HQ is implementing like Click List or expanded deli hot food are lousy programs and a lot of stress is put on the store to execute these poorly thought out programs. Scan Bag and Go a program already failed by Albertsons over a decade ago is going to be another headache for stores that are already pretty tapped out operationally at this point. Kroger HQ needs to stick to what it does well: private label program and pricing. Leave merchandising and perimeter operation decisions to the divisions.

I'm not too impressed with Kroger's pricing lately either. The quality of their ads/promotions seems to have deteriorated. I find myself buying more and more at WinCo and saving 15-20%. Before, I was happy to pay a 5-10% premium to shop at Kroger. Unfortunately between a lot of out of stocks, and the price gap widening, WinCo has become a more and more appealing option.

I feel bad because I can tell the management and employees in my local locations is really trying hard and wants to do things right, but it is pretty tough when you don't get product and are dealt a bunch of poor programs that take a ton of time in a market where it is tough to get enough employees to staff the store properly for basic functions.

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