wnetmacman wrote:Kroger, outside a few stores here and there, hasn't grown organically in over 20 years. They go in, buy a competitor, and take over. Only problem with Florida is that the only competitor left there is Winn-Dixie. And they won't go where they can't be #1; they would have to put a lot into WD.
I could see Kroger acquiring Winn-Dixie, but not the entirety of Southeastern Grocers including Bi-Lo and Harvey's. Bi-Lo is not doing well in North Carolina and Myrtle Beach, South Carolina, markets where Publix is expanding.
Winn-Dixie has a working concept for a potential buyer to support and work with. Is it doing enough to attract interest from either Kroger or Albertson's?
Knight wrote:I could see Kroger acquiring Winn-Dixie, but not the entirety of Southeastern Grocers including Bi-Lo and Harvey's. Bi-Lo is not doing well in North Carolina and Myrtle Beach, South Carolina, markets where Publix is expanding.
Recent history shows that when Kroger buys, they don't pick and choose what parts of the company they want:
Harris Teeter, Smith's, Ralphs, and Fred Meyer were all complete buyouts. No picking and choosing, and all are fairly successful in their operating areas.
WD is not as successful. That's why I wouldn't see Kroger buying them; too much work to fix them.
I will agree Kroger has acquired chains in their entirety, and would not be interested in Southeastern Grocers as a whole. I think Kroger may make one or two major acquisitions in the near future.
Knight wrote:I will agree Kroger has acquired chains in their entirety, and would not be interested in Southeastern Grocers as a whole. I think Kroger may make one or two major acquisitions in the near future.
Kroger had been sniffing at Winn-Dixie before the 2005 bankruptcy scared them off. Honestly, SE Grocers seems like a disappointment, they even had Randall Onstead at the helm for a while (Randall Onstead, who made the Randalls chain in the Houston a big success and starred in most of their commercials). A more likely choice for Kroger to snap at next is Schnucks of St. Louis. Meanwhile, Kroger is investing in and expanding their lone Florida Harris Teeter store, so maybe it means something in that front.
Knight wrote:I will agree Kroger has acquired chains in their entirety, and would not be interested in Southeastern Grocers as a whole. I think Kroger may make one or two major acquisitions in the near future.
Kroger had been sniffing at Winn-Dixie before the 2005 bankruptcy scared them off. Honestly, SE Grocers seems like a disappointment, they even had Randall Onstead at the helm for a while (Randall Onstead, who made the Randalls chain in the Houston a big success and starred in most of their commercials). A more likely choice for Kroger to snap at next is Schnucks of St. Louis. Meanwhile, Kroger is investing in and expanding their lone Florida Harris Teeter store, so maybe it means something in that front.
Cleveland, Pittsburgh, and St. Louis all appear like logical markets for Kroger to enter (or rather re-enter) given the fact that Kroger has stores adjacent to all 3 markets and all 3 markets are within a 5 hour drive of Cincinnati.
Of course, it would also make sense for Kroger to enter Northern California (which is surrounded on all sides by Kroger divisions) yet like Cleveland, Pittsburgh, and St. Louis Kroger has decided to virtually exit that market (Except for a handful of FoodsCo stores).
I'd say that Giant Eagle and Schnucks are both very logical fits for Kroger (and are both presumably healthier than Southeastern Grocers). If Kroger wants to take on a project then Save Mart could make sense. In all three cases (Giant Eagle, Schnucks, and Save Mart) Kroger may end up with some of it's old stores back.
Knight wrote:I will agree Kroger has acquired chains in their entirety, and would not be interested in Southeastern Grocers as a whole. I think Kroger may make one or two major acquisitions in the near future.
Kroger had been sniffing at Winn-Dixie before the 2005 bankruptcy scared them off. Honestly, SE Grocers seems like a disappointment, they even had Randall Onstead at the helm for a while (Randall Onstead, who made the Randalls chain in the Houston a big success and starred in most of their commercials). A more likely choice for Kroger to snap at next is Schnucks of St. Louis. Meanwhile, Kroger is investing in and expanding their lone Florida Harris Teeter store, so maybe it means something in that front.
Cleveland, Pittsburgh, and St. Louis all appear like logical markets for Kroger to enter (or rather re-enter) given the fact that Kroger has stores adjacent to all 3 markets and all 3 markets are within a 5 hour drive of Cincinnati.
Of course, it would also make sense for Kroger to enter Northern California (which is surrounded on all sides by Kroger divisions) yet like Cleveland, Pittsburgh, and St. Louis Kroger has decided to virtually exit that market (Except for a handful of FoodsCo stores).
I'd say that Giant Eagle and Schnucks are both very logical fits for Kroger (and are both presumably healthier than Southeastern Grocers). If Kroger wants to take on a project then Save Mart could make sense. In all three cases (Giant Eagle, Schnucks, and Save Mart) Kroger may end up with some of it's old stores back.
Of those three, Schnucks seems like a likely bet. Giant Eagle is in too many overlapping markets, and Save Mart from what I hear isn't all that good of an operation (better than Winn-Dixie from what I hear, but not by a whole lot). If Kroger goes for Save Mart, Albertsons would almost certainly have Save Mart's use of the Lucky name revoked (even though now Save Mart and Safeway compete in Northern California).
Kroger buys quality companies. They don't buy poorly run, poorly positioned companies. I see it as very unlikely that they would want a SaveMart or Winn-Dixie.
klkla wrote:Kroger buys quality companies. They don't buy poorly run, poorly positioned companies. I see it as very unlikely that they would want a SaveMart or Winn-Dixie.
That's why I was thinking (along with pseudo3d) that Schnucks and/or Giant Eagle would make more sense. Giant Eagle's entire territory is within 5 hours of Cincinnati (with several stores within 2-3 hours) and they don't overlap in Cleveland or Pittsburgh (although there is some overlap around Columbus). Schnucks and Kroger have swapped stores between one another so now I don't believe one operates in the other's territory.
I doubt Kroger would want Save Mart but in much of Save Mart's territory they simply have Safeway to contend with (and a much weaker Walmart presence than pretty much anywhere else in the country). Kroger does well against Safeway (and Albertsons/Safeway) in most of the other markets that overlap. Save Mart would require some work. Many of their stores are Albertsons and Kroger rejects. However, I can't imagine Kroger running the stores worse than they are now and Save Mart has less competition than Winn-Dixie.
arizonaguy wrote:
That's why I was thinking (along with pseudo3d) that Schnucks and/or Giant Eagle would make more sense.
That's why I didn't mention them. They're both operating at a much higher level than SaveMart or Winn-Dixie. Giant Eagle stores average more than $750,000 a week, maybe even closer to $800,000 now, and they're privately owned. Schnuck's is also privately owned and neither owner has given any indication they're interested in selling as far as I know.
arizonaguy wrote:I doubt Kroger would want Save Mart but in much of Save Mart's territory they simply have Safeway to contend with (and a much weaker Walmart presence than pretty much anywhere else in the country).
There are two sides of SaveMart. There's the smaller Lucky brand that operates in the bay area. This is where their best real estate is and very little low price competition. But the heart of SaveMart's operation is in the Central Valley where real estate is cheap and they compete heavily with WalMart, Food4Less and the various Latino chains. Those stores are in terrible shape for the most part and are pretty much low volume neighborhood stores. Those stores are similar to the bulk of smaller stores Stater Bros. operates in the Inland Empire except they don't enjoy a reputation for every low prices and good customer service like SB.
arizonaguy wrote:
That's why I was thinking (along with pseudo3d) that Schnucks and/or Giant Eagle would make more sense.
That's why I didn't mention them. They're both operating at a much higher level than SaveMart or Winn-Dixie. Giant Eagle stores average more than $750,000 a week, maybe even closer to $800,000 now, and they're privately owned. Schnuck's is also privately owned and neither owner has given any indication they're interested in selling as far as I know.
arizonaguy wrote:I doubt Kroger would want Save Mart but in much of Save Mart's territory they simply have Safeway to contend with (and a much weaker Walmart presence than pretty much anywhere else in the country).
There are two sides of SaveMart. There's the smaller Lucky brand that operates in the bay area. This is where their best real estate is and very little low price competition. But the heart of SaveMart's operation is in the Central Valley where real estate is cheap and they compete heavily with WalMart, Food4Less and the various Latino chains. Those stores are in terrible shape for the most part and are pretty much low volume neighborhood stores. Those stores are similar to the bulk of smaller stores Stater Bros. operates in the Inland Empire except they don't enjoy a reputation for every low prices and good customer service like SB.
Unlike Albertsons, Kroger has the resources to engage in a wide-spread organic expansion effort. If Kroger was willing to not be #1 initially, they could force their way in to Florida via the one-store-in-Florida Harris Teeter and avoid the suspicions that come with purchasing a smaller company. With a more upscale appearance than the typical stock-and-trade Kroger stores, they could eat Albertsons' lunch by buying up real estate and destroying the viability of W-D stores Albertsons may have had their eye on, as well as attracting a customer based starved for another real option. They could damper any plans Albertsons had to "repopulate" the area, destroy Winn-Dixie, and put the heat on Publix, all in one fell swoop.
