Kroger to "explore strategic options" for Turkey Hill brand

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storewanderer
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Kroger to "explore strategic options" for Turkey Hill brand

Post by storewanderer » August 7th, 2018, 9:29 pm

So it looks like Kroger now is looking to sell off the Turkey Hill dairy, experience, and brand name (ice cream, tea, and lemonade).

This may actually be a brand that would be more successful "outside Kroger." I always found it funny back east to see the various competitors of Kroger, selling this Kroger brand product.

But at the same time, again, I am not sure why Kroger wants to sell off legacy assets that seem stable and profitable, in order to throw money into all these technology initiatives yet they can't even do a simple technology initiative such as accepting Apple Pay in their stores.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by pseudo3d » August 9th, 2018, 7:59 pm

storewanderer wrote:
August 7th, 2018, 9:29 pm
But at the same time, again, I am not sure why Kroger wants to sell off legacy assets that seem stable and profitable, in order to throw money into all these technology initiatives yet they can't even do a simple technology initiative such as accepting Apple Pay in their stores.
I can't imagine Turkey Hill being a huge asset to sell (unlike the convenience stores, which were a pretty big chunk), unless they were particularly needing cash to pay down debt. If Turkey Hill was owned by Albertsons I could see this happening, but unless Kroger is not telling its shareholders something, it probably can hold its own and doesn't need to be divested.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by storewanderer » August 9th, 2018, 10:52 pm

It seems to be an ongoing theme at Kroger to divest "non core" assets. But the problem then is how will they define a "core asset?"

It would be interesting to see how much they could get for Turkey Hill. It is a strong brand back in its home territory. Attempts to expand it outside seem to be more and more diluted the more west you get.

Kroger also uses some of its plants out west to make certain Turkey Hill items to be sold out here. I don't think it is a well known fact that Kroger owns that brand.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by arizonaguy » August 10th, 2018, 9:06 am

What percentage of Turkey Hill sales are at Kroger owned stores versus other retailers?

To me Turkey Hill seems like an asset that Kroger shouldn't sell. Private Labels are going to be one of the biggest areas of differentiation in this new era of retail that we are in and Turkey Hill seems like a valuable asset for Kroger to keep.

I personally love Turkey Hill ice cream and it is a reason I shop at Fry's versus other other retailers.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by babs » August 10th, 2018, 1:14 pm

I've always wondered when Kroger was going sell Fred Meyer Jewelers. Not really a core asset. It booms during a good economy and craters during recessions.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by storewanderer » August 10th, 2018, 11:59 pm

babs wrote:
August 10th, 2018, 1:14 pm
I've always wondered when Kroger was going sell Fred Meyer Jewelers. Not really a core asset. It booms during a good economy and craters during recessions.
The jewelry division seems to have been closing its mall based stores over the years, but has opened some new stores inside various new build Marketplace Stores. I have always wondered how those do, however, they probably don't need to do a ton of volume to turn a profit.

As far as Turkey Hill goes, I too question Kroger selling it. Keep in mind once you get to about Texas, that is a brand sold by numerous other retailers and not just Kroger. It is only out west that it seems to be a Kroger exclusive. At Smiths stores supplied from Utah, the ice cream sells well but the bottled drinks which were just added to the mix last year (amazing how long it took) have not sold too well (they have few flavors) for some reason; I think poor shelf placement and a lack of customer knowledge have caused the slow sales. Also in my long term visits to Kansas at Dillons I was often able to get the bottled drinks on markdown so I don't know how well it sold there either.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by Super S » August 11th, 2018, 8:13 am

storewanderer wrote:
August 10th, 2018, 11:59 pm
babs wrote:
August 10th, 2018, 1:14 pm
I've always wondered when Kroger was going sell Fred Meyer Jewelers. Not really a core asset. It booms during a good economy and craters during recessions.
The jewelry division seems to have been closing its mall based stores over the years, but has opened some new stores inside various new build Marketplace Stores. I have always wondered how those do, however, they probably don't need to do a ton of volume to turn a profit.

As far as Turkey Hill goes, I too question Kroger selling it. Keep in mind once you get to about Texas, that is a brand sold by numerous other retailers and not just Kroger. It is only out west that it seems to be a Kroger exclusive. At Smiths stores supplied from Utah, the ice cream sells well but the bottled drinks which were just added to the mix last year (amazing how long it took) have not sold too well (they have few flavors) for some reason; I think poor shelf placement and a lack of customer knowledge have caused the slow sales. Also in my long term visits to Kansas at Dillons I was often able to get the bottled drinks on markdown so I don't know how well it sold there either.
Fred Meyer Jewelers will probably exist as long as the Fred Meyer brand exists. It started years ago as a department within Fred Meyer stores, then branched out to malls. I am curious though how well they do inside the Kroger Marketplace stores in places like Ohio where Fred Meyer is an otherwise unknown name.

Jewelry is something I know nothing about, so I don't know how they compare to a true jewelry store, but it's worth noting that the departments have seen little to no change in size during the most recent Fred Meyer remodels, while other non-food departments have been scaled back.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by storewanderer » August 11th, 2018, 10:57 am

Super S wrote:
August 11th, 2018, 8:13 am
storewanderer wrote:
August 10th, 2018, 11:59 pm
babs wrote:
August 10th, 2018, 1:14 pm
Fred Meyer Jewelers will probably exist as long as the Fred Meyer brand exists. It started years ago as a department within Fred Meyer stores, then branched out to malls. I am curious though how well they do inside the Kroger Marketplace stores in places like Ohio where Fred Meyer is an otherwise unknown name.

Jewelry is something I know nothing about, so I don't know how they compare to a true jewelry store, but it's worth noting that the departments have seen little to no change in size during the most recent Fred Meyer remodels, while other non-food departments have been scaled back.
I believe the jewelry stores operate as a tenant rather than as a department within the Fred Meyer Store. I may be wrong on this. I think the jewelry division is "paying rent" to the Fred Meyer Store. This may explain why the spaces are not being downsized. I have observed some customer traffic in those jewelry stores within the Fred Meyer locations.

Jewelry may be small enough that they just keep it... unless they can get some kind of huge multiple for it like they got for the convenience stores.

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Re: Kroger to "explore strategic options" for Turkey Hill brand

Post by mbz321 » August 11th, 2018, 8:11 pm

Turkey Hill is probably the #1 Brand of Ice Cream and bottled teas and such in PA and surrounding states....it seems stupid for them to sell it off, but it also seemed odd that they owned it to begin with given their lack of a grocery store presence in the surrounding states (Turkey Hill Dairy is basically in the southeastern corner of the state in Lancaster County).

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