Retail Watchers

Here's the link to the story:

http://www.chainstoreage.com/article/kr ... lty-grocer

I guess it makes sense, since they had already been featuring their products in a number of the Kroger locations, but it is a bit separated from any other Kroger area. Unless they might have thoughts on other things in that area?

BillyGr wrote:Unless they might have thoughts on other things in that area?

Or perhaps a supermarket chain headquartered in Upstate NY that's reportedly on the block and was (supposedly) being looked at by Albertsons? You never know.

BillyGr wrote:I guess it makes sense, since they had already been featuring their products in a number of the Kroger locations, but it is a bit separated from any other Kroger area. Unless they might have thoughts on other things in that area?

My guess is that there was initially a contract that they had with MC that was coming close to expiring, and they ended up buying the company (I'd expect to see Lucky's Market end up being bought as well later down the line)

TW-Upstate NY wrote:
Or perhaps a supermarket chain headquartered in Upstate NY that's reportedly on the block and was (supposedly) being looked at by Albertsons? You never know.

I doubt it. Kroger isn't as big into acquisitions like Albertsons is, and given that Price Chopper wanted to maintain control of their stores and an article about the breaking of the courtship mentioned that Price Chopper's market share was shrinking makes a PC acquisition by Kroger pretty unlikely at this point. It would be more plausible if they ended up buying Ahold's U.S. holdings, to be honest.

pseudo3d wrote:I doubt it. Kroger isn't as big into acquisitions like Albertsons is, and given that Price Chopper wanted to maintain control of their stores and an article about the breaking of the courtship mentioned that Price Chopper's market share was shrinking makes a PC acquisition by Kroger pretty unlikely at this point. It would be more plausible if they ended up buying Ahold's U.S. holdings, to be honest.

Kroger is big into acquisitions. To say their expansion wasn't fueled by them is a historical omission of grand proportions.

Companies Kroger has acquired:

• Henke & Pillot (Texas)
  Childs (Texas and Louisiana)
  Krambo (WI)
  Ralphs (West Coast)
  Fred Meyer (West Coast)
  Smith's (West of the Rockies)
  King Sooper's/City Market (Rocky Mountains)
  Hilander Foods (Illinois, since sold)
  Kessel Food Markets (Michigan)
  Harris Teeter (East Coast)
  And several others...

Kroger's main expansion was heavily fueled by acquisitions. They could be interested in Ahold Delhaize, but that would be a huge FTC nightmare at this point. I don't think Price Chopper/Market 21 is up for sale at this point.

BillyGr wrote:I guess it makes sense, since they had already been featuring their products in a number of the Kroger locations, but it is a bit separated from any other Kroger area. Unless they might have thoughts on other things in that area?

Kroger has owned the Turkey Hill Dairy (and the associated mini-mart chain) in Central PA since the mid 1980's and they have yet to experiment with opening new supermarkets in the state.

wnetmacman wrote:

pseudo3d wrote:I doubt it. Kroger isn't as big into acquisitions like Albertsons is, and given that Price Chopper wanted to maintain control of their stores and an article about the breaking of the courtship mentioned that Price Chopper's market share was shrinking makes a PC acquisition by Kroger pretty unlikely at this point. It would be more plausible if they ended up buying Ahold's U.S. holdings, to be honest.

Kroger is big into acquisitions. To say their expansion wasn't fueled by them is a historical omission of grand proportions.

Companies Kroger has acquired:

• Henke & Pillot (Texas)
  Childs (Texas and Louisiana)
  Krambo (WI)
  Ralphs (West Coast)
  Fred Meyer (West Coast)
  Smith's (West of the Rockies)
  King Sooper's/City Market (Rocky Mountains)
  Hilander Foods (Illinois, since sold)
  Kessel Food Markets (Michigan)
  Harris Teeter (East Coast)
  And several others...

Kroger's main expansion was heavily fueled by acquisitions. They could be interested in Ahold Delhaize, but that would be a huge FTC nightmare at this point. I don't think Price Chopper/Market 21 is up for sale at this point.

Right, in a historical sense (the Henke & Pillot purchase laid the groundwork for their power in Houston, they've always been in the top 3) but their acquisitions these days are few and far between (Harris Teeter, Fred Meyer, Roundy's), whereas except the SuperValu/LLC days, Albertsons was eating everything it reasonably could from pre-1999 (American Stores, Seessel's, Buttrey, Smitty's-MO) to post-2013 (United, A&P, Paul's, Safeway). And while acquisitions helped Kroger got where it is today, many of those are no longer relevant...they pulled out of WI years ago, most of their Louisiana stores are gone, Hilander is gone. Assuming they only go for Ahold (not Delhaize, as per the "Stop & Shop divisions" thread, the two are still separate subsidiaries in the U.S., none of the Ahold stores conflict with Kroger (Food Lion not so much).

Growth by acquisition is fine for chains that really do not have much to offer on their own accord. For chains that have something to offer, organic growth is better. Look at Publix, look at Hy Vee, look at Albertsons during its successful years in the 90's... a common theme was organic expansion. Most of the chains that are well regarded, or well liked, seem to grow organically.

Kroger has, in the past decade, come up with some things to offer that could allow them to do some organic expansion too, if they wanted to. The Marketplace format is unique, their pricing and mix is much better than most competitors, and they have some pretty good perimeter and private label programs that are again better than most competitors. There is also the "people" component that can make or break organic growth but that is a whole different topic entirely... and it may be another big reason why acquisitions feel so favorable to much of the industry.

The mark up on cheese must sure be great because Kroger is really proud of this cheese program.

pseudo3d wrote:It would be more plausible if they [Kroger] ended up buying Ahold's U.S. holdings, to be honest.

Ahold USA and Delhaize America remain two separate entities under Ahold Delhaize. Both entities should merge into one.

Giant-Carlislie/Martin's, Giant-Landover, Hannaford, and Stop & Shop/bfresh could be doable for Kroger to expand into the northeastern United States. Food Lion will be hit hard by limited assortment/discount grocer Lidl and supermarket Publix in North Carolina and Virginia.

Knight wrote:

pseudo3d wrote:It would be more plausible if they [Kroger] ended up buying Ahold's U.S. holdings, to be honest.

Ahold USA and Delhaize America remain two separate entities under Ahold Delhaize. Both entities should merge into one.

Giant-Carlislie/Martin's, Giant-Landover, Hannaford, and Stop & Shop/bfresh could be doable for Kroger to expand into the northeastern United States. Food Lion will be hit hard by limited assortment/discount grocer Lidl and supermarket Publix in North Carolina and Virginia.

With Lidl stores being about 35k square feet stores and in pretty much the same territory, I'm wondering if it not might be a huge stretch to imagine Lidl buying up Food Lion entirely. But that's for a different topic.

Kroger buying the remaining holdings would be a huge expansion and akin to what Fred Meyer did for Kroger's West Coast holdings. The only catch might be Harris Teeter/Giant-MD around Washington DC, but that's about it.