Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

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Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by mbz321 »

https://consumerist.com/2017/10/11/krog ... e-10291264
Kroger announced this morning that it has retained Goldman Sachs to evaluate its options for the convenience store division, which operates 784 stores in 18 states.

According to Kroger, this network of stores bring in $1.4 billion a year to the company, selling about 1.2 billion gallons of fuel to customers.

“Our convenience stores are strong, successful and growing with the potential to grow even more,” said Kroger Chief Financial Officer Mike Schlotman. “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.”
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by pseudo3d »

Why not take over some of the convenience stores themselves? When Kroger bought a number of Houston Division Albertsons stores the Albertsons Express stores were flipped to Kwik Shop, but about a year ago or so Kroger bought an independent Exxon in College Station, TX and converted it to a genuine Kroger convenience store actually operated by the company.

I'm not sure about the rest of the chain...some of the franchised Kwik Shops I've heard are pretty dreadful, and operating Tom Thumb in Florida is probably not conducive to the company's operation (not to mention the confusion with the Tom Thumb STORES owned by Safewalbertsons).
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by CalItalian »

https://www.cnbc.com/2017/10/11/kroger- ... tores.html
Ralphs is my favorite store. But Kroger is way behind in being tech savvy which is an area they want to expand on with some of the funds from this potential sale.

Ralphs Clicklist is a complete joke. For one, you don't know what the actual prices are until you pick up your order. If there is a multi-item sale, such as in this weeks ad $4 off 4 selected items, you can not see it when you order. If you order on Tuesday and your order isn't fulfilled until Wednesday, you don't get Tuesday's possibly lower sale prices. Although Ralphs digital coupons, which they are constantly pushing, are applied to your order, you can not see if they will be or not until you pick up your order, either.

Ralphs constantly has problems with their social media and digital coupons. Until this week, they were unable or delayed in posting their weekly ad on Facebook for a number of weeks. On Monday, on Twitter, Ralphs posted that the ad that started today was online. But they didn't post a link to it. It takes their social media person sometimes days to respond to people who are asking questions especially when a link or coupon is missing that has been promised or is not correctly working (such as the $5 off $15 meat department digital coupon that was supposed to be online on Tuesday but errored out until today).
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by rwsandiego »

CalItalian wrote: October 11th, 2017, 11:31 am https://www.cnbc.com/2017/10/11/kroger- ... tores.html
Ralphs is my favorite store. But Kroger is way behind in being tech savvy which is an area they want to expand on with some of the funds from this potential sale.

Ralphs Clicklist is a complete joke. For one, you don't know what the actual prices are until you pick up your order. If there is a multi-item sale, such as in this weeks ad $4 off 4 selected items, you can not see it when you order. If you order on Tuesday and your order isn't fulfilled until Wednesday, you don't get Tuesday's possibly lower sale prices. Although Ralphs digital coupons, which they are constantly pushing, are applied to your order, you can not see if they will be or not until you pick up your order, either.

Ralphs constantly has problems with their social media and digital coupons. Until this week, they were unable or delayed in posting their weekly ad on Facebook for a number of weeks. On Monday, on Twitter, Ralphs posted that the ad that started today was online. But they didn't post a link to it. It takes their social media person sometimes days to respond to people who are asking questions especially when a link or coupon is missing that has been promised or is not correctly working (such as the $5 off $15 meat department digital coupon that was supposed to be online on Tuesday but errored out until today).
I'm with you that Kroger should allocate some proceeds from a c-store divestiture and invest in better technology. When I wanted to update the phone number on my Ralph's Club card they told me I had to get a new card. So I did. Then, when the app came out they told me I needed another card account. I acquired one. After moving to Arizona, the Ralph's app didn't give me Fry's specials, so I had to download the Fry's app and, wait for it..., get a new card with yet a different phone number. Finally, a Fry's employee provided the number to Kroger's loyalty card hotline and my mobile number (Ralph's Club card account #2) works at Fry's and could be associated with the Fry's app.

Meanwhile, much-maligned (often well-deserved) Safeway lets me use the VONS app at Safeway using the Dominick's Fresh Values Card account that started out as a Dominick's check-cashing card account in 1982.
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by architect »

rwsandiego wrote: October 11th, 2017, 2:30 pm
CalItalian wrote: October 11th, 2017, 11:31 am https://www.cnbc.com/2017/10/11/kroger- ... tores.html
Ralphs is my favorite store. But Kroger is way behind in being tech savvy which is an area they want to expand on with some of the funds from this potential sale.

Ralphs Clicklist is a complete joke. For one, you don't know what the actual prices are until you pick up your order. If there is a multi-item sale, such as in this weeks ad $4 off 4 selected items, you can not see it when you order. If you order on Tuesday and your order isn't fulfilled until Wednesday, you don't get Tuesday's possibly lower sale prices. Although Ralphs digital coupons, which they are constantly pushing, are applied to your order, you can not see if they will be or not until you pick up your order, either.

Ralphs constantly has problems with their social media and digital coupons. Until this week, they were unable or delayed in posting their weekly ad on Facebook for a number of weeks. On Monday, on Twitter, Ralphs posted that the ad that started today was online. But they didn't post a link to it. It takes their social media person sometimes days to respond to people who are asking questions especially when a link or coupon is missing that has been promised or is not correctly working (such as the $5 off $15 meat department digital coupon that was supposed to be online on Tuesday but errored out until today).
I'm with you that Kroger should allocate some proceeds from a c-store divestiture and invest in better technology. When I wanted to update the phone number on my Ralph's Club card they told me I had to get a new card. So I did. Then, when the app came out they told me I needed another card account. I acquired one. After moving to Arizona, the Ralph's app didn't give me Fry's specials, so I had to download the Fry's app and, wait for it..., get a new card with yet a different phone number. Finally, a Fry's employee provided the number to Kroger's loyalty card hotline and my mobile number (Ralph's Club card account #2) works at Fry's and could be associated with the Fry's app.

Meanwhile, much-maligned (often well-deserved) Safeway lets me use the VONS app at Safeway using the Dominick's Fresh Values Card account that started out as a Dominick's check-cashing card account in 1982.
Not to take this thread off topic, but I have actually had the exact opposite problem. I have had to get my Kroger card replaced multiple times (across multiple addresses), and every time, I was able to easily sign into my online account and simply change the card number associated with the account. On the flipside, I have had to get a replacement Tom THumb (Safeway) card multiple times, and each time the process has somehow created an entirely new account registered to the same phone number, but not linked to my old account. Therefore, if I enter my phone number at checkout, it is a crapshoot on whether coupons which have been applied through the app will even be active. I finally just gave up as the local Tom Thumb/Albertsons stores are becoming so poorly run that I hardly shop there anymore.

As far as Kroger selling convenience stores, would it make sense for Kroger to just sell the stores outside of their core grocery markets?
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by storewanderer »

The convenience store operations of Kroger have slipped greatly in the past couple of years. Stores have become dirty, stocked oddly, poorly executed food and drink programs, and higher pricing. This is based on what I see at Quik Stop in CA/NV and at Kwik Shops I went into in Kansas last spring.

With all of that said, I think the convenience stores provided a good synergy or compliment to the grocery operations in Kansas, Colorado, and other states up that way. Also, a good tie in for the loyalty card program. Those stores have heavy grocery mixes compared to a typical c-store including various dairy/breads that are manufacturer at Kroger plants, a few even have pharmacy. I can't speak for Turkey Hill's stores, but have to think somehow those stores help the dairy brand in some way. Not sure what real purpose Tom Thumb serves. Quik Stop is largely very poor, aside from the newer Nevada Stores and the 5-6 new stores they've built in California in the past 20 years. They haven't opened a new build Quik Stop in many years now, but they did recently take over a real dumpy Shell at an extremely busy intersection in Citrus Heights, CA.

Kroger used to have very good technology but seems to have fallen behind the past 4-5 years.

Still, what Kroger is doing now, cutting off things from the regular operation (like delaying remodels/new stores or decreasing how many they are doing) (and like selling convenience stores that have been heavily cross marketed in some markets and have a strong loyalty program tie in), to spend money on technology initiatives... that is really like a money pit.

We will see how this all works out.

Maybe if Kroger can get Circle K to take these stores on, the loyalty card tie in can continue as they have Circle K for fuel discounts in Arizona.

Kroger's sudden interest in technology comes a little too late. Fred Meyer should have been selling online 15 years ago, but they didn't bother. At this point they are playing catch up with far more sophisticated competitors. Kroger's in-store and private label programs are far better than any competition and somehow they need to build on those successes. Not try and make up for a decade of technology neglect overnight. It will just be a money pit. And it will not end well.
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by wnetmacman »

pseudo3d wrote: October 11th, 2017, 11:23 am Why not take over some of the convenience stores themselves? When Kroger bought a number of Houston Division Albertsons stores the Albertsons Express stores were flipped to Kwik Shop, but about a year ago or so Kroger bought an independent Exxon in College Station, TX and converted it to a genuine Kroger convenience store actually operated by the company.

I'm not sure about the rest of the chain...some of the franchised Kwik Shops I've heard are pretty dreadful, and operating Tom Thumb in Florida is probably not conducive to the company's operation (not to mention the confusion with the Tom Thumb STORES owned by Safewalbertsons).
All of the convenience stores you're referring to are run by the convenience division, including the College Station store and the old Albertsons Express stores. If anything, they'll probably just give up gas sales at those locations and make an agreement with someone like Circle K. All of the Albertsons Express stores that stayed with the chain became Valero except one in Baton Rouge, and those are all becoming Circle K now.

As for the Tom Thumb stores, those mostly operate in the Southeast (mainly Florida) so there's little confusion with the Texas division of Albertsafeway. Some of those stores have Kroger Pharmacies inside.
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by mbz321 »

storewanderer wrote: October 11th, 2017, 7:45 pm I can't speak for Turkey Hill's stores, but have to think somehow those stores help the dairy brand in some way.

Turkey Hill stores are just flat out meh and are the equivalent of '7-11' for the Central PA area (7-11 is pretty much nonexistent besides a store or two in Harrisburg, PA). They have been upgrading their stores over the past few years to include more 'made to order' food items, but not really an impressive selection of anything. They get crushed by Sheetz, Wawa, and a smaller chain called Rutter's, which overlap in much of TH's operating area, in regards to fresh food, and have too many outdated stores that may only have two gas pumps, if any at all. They are pretty much the only mini mart chain that stocks Turkey Hill branded products except for maybe a few independents, but I don't know if that really causes any loyalty.

I always found it odd that Kroger owns both the mini marts and the dairy despite no other Kroger presence anywhere in the state, and many adjoining ones except for OH and WV.
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by pseudo3d »

wnetmacman wrote: October 11th, 2017, 8:30 pm
pseudo3d wrote: October 11th, 2017, 11:23 am Why not take over some of the convenience stores themselves? When Kroger bought a number of Houston Division Albertsons stores the Albertsons Express stores were flipped to Kwik Shop, but about a year ago or so Kroger bought an independent Exxon in College Station, TX and converted it to a genuine Kroger convenience store actually operated by the company.

I'm not sure about the rest of the chain...some of the franchised Kwik Shops I've heard are pretty dreadful, and operating Tom Thumb in Florida is probably not conducive to the company's operation (not to mention the confusion with the Tom Thumb STORES owned by Safewalbertsons).
All of the convenience stores you're referring to are run by the convenience division, including the College Station store and the old Albertsons Express stores. If anything, they'll probably just give up gas sales at those locations and make an agreement with someone like Circle K. All of the Albertsons Express stores that stayed with the chain became Valero except one in Baton Rouge, and those are all becoming Circle K now.
The College Station store was supposed to be unique in the fact that it was Kroger-branded and it was indicated that it was run by the same division. Can't really tell that but I can tell you that the article of using the same logo as their other operations as reported by Supermarket News is not entirely accurate (check it out here), as it bears some uniqueness from just putting "Kroger" on the canopy, like a typical converted store here in Houston. The phrasing of the article about opening more Kroger convenience stores also seems to suggest not the convenience store division, but again, that ties into the theory that if the store was a great success there would probably be more of them by now. The article also seems to indicate that it's further away from the Kroger ("less than two miles") but it's just across the street. The shopping center was already fully built out with a large bank building on the corner, so Kroger bought out a nearby Exxon.
mbz321 wrote: October 11th, 2017, 8:31 pm Turkey Hill stores are just flat out meh and are the equivalent of '7-11' for the Central PA area (7-11 is pretty much nonexistent besides a store or two in Harrisburg, PA). They have been upgrading their stores over the past few years to include more 'made to order' food items, but not really an impressive selection of anything. They get crushed by Sheetz, Wawa, and a smaller chain called Rutter's, which overlap in much of TH's operating area, in regards to fresh food, and have too many outdated stores that may only have two gas pumps, if any at all. They are pretty much the only mini mart chain that stocks Turkey Hill branded products except for maybe a few independents, but I don't know if that really causes any loyalty.
7-Eleven's going to get a lot bigger when they acquire and rebrand the Sunoco APlus stores. But if Turkey Hill is largely out of date, then there's not going to be a lot of benefit in keeping the chain intact. It would've been better if Kroger had tried to market its convenience store division before Circle K and 7-Eleven went big game hunting.
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Re: Kroger May Sell Off Its Convenience Store Chains, Including Kwik Shop, Tom Thumb, Turkey Hill

Post by storewanderer »

I agree I feel like Kroger is late to the party to try to market its convenience stores. But 7-Eleven hasn't been nearly as active at buying things as Circle K so maybe they will bite.

I think the best quality asset of the convenience stores is Loaf N Jug. Quik Stop and Kwik Shop are quite similar with many very old stores and not in great condition, but Kwik Shop has more newer stores. Quik Stop is a unique case as many are franchised. The other convenience stores are all corporate operations.

It may end up they sell them piecemeal...

They also own a good amount of the real estate that those convenience stores sit on...

There are some convenience stores that are operated by the Supermarket Divisions, not by the Convenience Store division. Smiths has 3 of them (two in Salt Lake City, one in Mesquite, NV). The stores were set/merchandised to Loaf N Jug specs, but they are operated fully by Smiths. Those in Texas are operated by the Supermarket Division as well.
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