Midwest Territory Expansion

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Bakeragr
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Re: Midwest Territory Expansion

Post by Bakeragr »

I can't seem to find a story backing up what I remember, but if I remember correctly, prior to Kroger purchasing Roundy's, they hinted that they would be doing an organic expansion into a new market. I don't believe that ever took place. However, when that was mentioned a few years ago, I really thought that the most logical new market for them would be Oklahoma.
I thought this as they do a great job in both Wichita and outstate Kansas, and they also seem to do well in Dallas. OKC and Tulsa are both dominated by Walmart and AWG-affiliated chains (Homeland and Reasor's). Now, Reasor's is pretty decent, but I'm not as familiar with Homeland.
However, I'm still baffled that Kroger threw in the towel in Springfield, MO in 2014. That might have been about the same time they threw around these expansion ideas. Pyramid Foods (Ramey Price Cutter) is the market leader in Springfield and had purchased several former Albertsons locations in Oklahoma, which they successfully ran into the ground and have either closed or sold to Homeland or Reasors. They really operate bad, non-competitive stores. If Kroger had simply waited out things in Springfield, I think they could have been the market leader there. I think they also got spooked by Hy-Vee, but here 7 years later and there's only one Hy-Vee in Springfield (2nd one is on its way, super slowly).
I think there's opportunity in Oklahoma, based on the gradual population growth and the lack of competitors. I think that's why Winco has dipped their toe into that market as well.
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Re: Midwest Territory Expansion

Post by pseudo3d »

Bakeragr wrote: February 11th, 2021, 6:12 am I can't seem to find a story backing up what I remember, but if I remember correctly, prior to Kroger purchasing Roundy's, they hinted that they would be doing an organic expansion into a new market. I don't believe that ever took place. However, when that was mentioned a few years ago, I really thought that the most logical new market for them would be Oklahoma.
I thought this as they do a great job in both Wichita and outstate Kansas, and they also seem to do well in Dallas. OKC and Tulsa are both dominated by Walmart and AWG-affiliated chains (Homeland and Reasor's). Now, Reasor's is pretty decent, but I'm not as familiar with Homeland.
However, I'm still baffled that Kroger threw in the towel in Springfield, MO in 2014. That might have been about the same time they threw around these expansion ideas. Pyramid Foods (Ramey Price Cutter) is the market leader in Springfield and had purchased several former Albertsons locations in Oklahoma, which they successfully ran into the ground and have either closed or sold to Homeland or Reasors. They really operate bad, non-competitive stores. If Kroger had simply waited out things in Springfield, I think they could have been the market leader there. I think they also got spooked by Hy-Vee, but here 7 years later and there's only one Hy-Vee in Springfield (2nd one is on its way, super slowly).
I think there's opportunity in Oklahoma, based on the gradual population growth and the lack of competitors. I think that's why Winco has dipped their toe into that market as well.
I believed I mentioned in another thread that there were (there's another thread here) on going to Hawaii. I'm not sure when Kroger fell off the horse, but it started around 2016.
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Re: Midwest Territory Expansion

Post by Bagels »

I'd be really, really surprised if Kroger expanded organically, especially with the growth of digital grocery shopping accelerating. Cub Foods, Giant Eagle, etc. could likely be had for less than book value, and even an acquisition on the level of Schuck's would be cheaper than building out a new fleet of stores.
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Re: Midwest Territory Expansion

Post by storewanderer »

I think whatever money Kroger was going to use on organic expansion into a new market is all being shifted to this digital/Ocado thing. And they are expanding that into new markets I guess... at least that one center in FL. I don't count DC since Harris Teeter is there. We will see how that works out.

Giant Eagle is a problem because there are a number of franchise stores and quite a few franchisees. Cub has a similar problem but it is less stores and only a couple franchisees and could probably be addressed more easily than Giant Eagle.
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Re: Midwest Territory Expansion

Post by Bagels »

storewanderer wrote: February 17th, 2021, 6:19 pm I think whatever money Kroger was going to use on organic expansion into a new market is all being shifted to this digital/Ocado thing. And they are expanding that into new markets I guess... at least that one center in FL. I don't count DC since Harris Teeter is there. We will see how that works out.

Giant Eagle is a problem because there are a number of franchise stores and quite a few franchisees. Cub has a similar problem but it is less stores and only a couple franchisees and could probably be addressed more easily than Giant Eagle.
I wouldn’t be surprised if Kroger tried to build out a National e-commerce network, but Is be surprised if they organically built out a store fleet in a new market.

I suspect, in the coming years, there will be plenty of options for growth via acquisition that will be much cheaper than building out a new store fleet. For example, if Amazon acquired SpartanNash - as many expect - they will likely give away the store fleet. That’s a good opportunity for Kroger to grow. Building out a new store fleet is not.

If Kroger wanted to enter Florida, it could acquire Winn Dixie for cheap. Even with WD’s issues, it’s be significantly less than building out a network.
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Re: Midwest Territory Expansion

Post by storewanderer »

Bagels wrote: February 17th, 2021, 6:44 pm
storewanderer wrote: February 17th, 2021, 6:19 pm I think whatever money Kroger was going to use on organic expansion into a new market is all being shifted to this digital/Ocado thing. And they are expanding that into new markets I guess... at least that one center in FL. I don't count DC since Harris Teeter is there. We will see how that works out.

Giant Eagle is a problem because there are a number of franchise stores and quite a few franchisees. Cub has a similar problem but it is less stores and only a couple franchisees and could probably be addressed more easily than Giant Eagle.
I wouldn’t be surprised if Kroger tried to build out a National e-commerce network, but Is be surprised if they organically built out a store fleet in a new market.

I suspect, in the coming years, there will be plenty of options for growth via acquisition that will be much cheaper than building out a new store fleet. For example, if Amazon acquired SpartanNash - as many expect - they will likely give away the store fleet. That’s a good opportunity for Kroger to grow. Building out a new store fleet is not.

If Kroger wanted to enter Florida, it could acquire Winn Dixie for cheap. Even with WD’s issues, it’s be significantly less than building out a network.
I don't think there is any reason for Amazon to acquire SpartanNash. Amazon seems to be building out its own grocery business with some help from Whole Foods just fine.
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Re: Midwest Territory Expansion

Post by pseudo3d »

Bagels wrote: February 17th, 2021, 6:44 pm
I wouldn’t be surprised if Kroger tried to build out a National e-commerce network, but Is be surprised if they organically built out a store fleet in a new market.

I suspect, in the coming years, there will be plenty of options for growth via acquisition that will be much cheaper than building out a new store fleet. For example, if Amazon acquired SpartanNash - as many expect - they will likely give away the store fleet. That’s a good opportunity for Kroger to grow. Building out a new store fleet is not.

If Kroger wanted to enter Florida, it could acquire Winn Dixie for cheap. Even with WD’s issues, it’s be significantly less than building out a network.


The fact that SpartanNash's stores hang around in Michigan, especially in the rural areas, should already show that Kroger either isn't interested in trying to take those areas. Otherwise, they would have made serious inroads and driven them out. As it stands, SpartanNash is quite comfortable running its grocery stores and supplying smaller grocery stores and food stores in their system. They also supply U.S. military bases.

Meanwhile, Amazon is more interested in large cities, and even now, I'm not sure Amazon wants to go "all in" on brick and mortar. They certainly aren't acting like it.

As for Florida, Kroger has continually snubbed Winn-Dixie for well over a decade. At this rate, Albertsons would probably acquire SEG before Kroger does.
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Re: Midwest Territory Expansion

Post by Romr123 »

SpartanNash's retail operations--Family Fare etc-- are primarily outside of Kroger's territory in Michigan and would get them back in to Grand Rapids and the areas where they've retreated from. The wholesale business covers the entire state. It would be interesting to examine it from an antitrust basis, because since Kroger is entirely absent from the city of Detroit, but has a necklace of stores around the city, where S-N is really the only significant supplier within the city (save for Meijer/WFM/Save-a-Lot).
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Re: Midwest Territory Expansion

Post by Bagels »

storewanderer wrote: February 17th, 2021, 10:36 pm
Bagels wrote: February 17th, 2021, 6:44 pm
storewanderer wrote: February 17th, 2021, 6:19 pm I think whatever money Kroger was going to use on organic expansion into a new market is all being shifted to this digital/Ocado thing. And they are expanding that into new markets I guess... at least that one center in FL. I don't count DC since Harris Teeter is there. We will see how that works out.

Giant Eagle is a problem because there are a number of franchise stores and quite a few franchisees. Cub has a similar problem but it is less stores and only a couple franchisees and could probably be addressed more easily than Giant Eagle.
I wouldn’t be surprised if Kroger tried to build out a National e-commerce network, but Is be surprised if they organically built out a store fleet in a new market.

I suspect, in the coming years, there will be plenty of options for growth via acquisition that will be much cheaper than building out a new store fleet. For example, if Amazon acquired SpartanNash - as many expect - they will likely give away the store fleet. That’s a good opportunity for Kroger to grow. Building out a new store fleet is not.

If Kroger wanted to enter Florida, it could acquire Winn Dixie for cheap. Even with WD’s issues, it’s be significantly less than building out a network.
I don't think there is any reason for Amazon to acquire SpartanNash. Amazon seems to be building out its own grocery business with some help from Whole Foods just fine.
SpartanNash has been an Amazon Fresh supplier since the program’a inception. In the fall, they signed an enhanced deal in which SpartanNash would open a distribution center in Maryland with the specific purpose of supplying Amazon. In addition, Amazon secured warrants to acquire 15% of SoartanNash’s stock.

Speculation is that a Amazon will eventually outright acquire SpartanNash, since it’s cheaper than building its own distribution network. Further speculation is that Amazon will have access to SpartanNash’s retail store data, which will given them some insight in how large scale (in terms of market) perform. E.g. Whole Foods is a speciality retailer but Family Fare is a neighborhood supermarket.

Some analysts are predicting that it’s a cheaper investment than the test outlets they traditionally run, and once they’re finished, they’ll dump the retail stores.

Hence my point that Kroger could probably acquire them for cheap. I wasn’t suggesting Amazon would reflag them as Amazon Fresh, although you never know.
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Re: Midwest Territory Expansion

Post by retailfanmitchell019 »

Bakeragr wrote: February 11th, 2021, 6:12 am Pyramid Foods (Ramey Price Cutter) is the market leader in Springfield and had purchased several former Albertsons locations in Oklahoma, which they successfully ran into the ground and have either closed or sold to Homeland or Reasors.
Price Cutter also purchased the Albertsons stores around Springfield (most of them former Smitty's- not related to AZ chain)in 2002. Albertsons bought the Smitty's-MO stores in 1998.
Albertsons actually built 1 store from the ground up in Springfield around 2000: https://www.google.com/maps/place/Price ... 93.3214733
Interior still has some Grocery Palace bits.
Another Price Cutter (ex-Smitty's) in Nixa (Springfield suburb) still has Grocery Palace, and even Albertsons-font Food & Pharmacy signs: https://www.google.com/maps/place/Price ... 93.3012843
Albertsons could probably buy back these stores and keep the Price Cutter name, or convert them to Albertsons. Probably the former, as there aren't much people in Springfield who remember Albertsons.
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