Kroger has announced it could sell its $4 billion convenience store business that spans 18 states and includes QuickStop, KwikShop and Turkey Hill Minit Markets.
The retailer says the business, which includes 784 stores, would be more valuable outside the company.
Kroger has seen its stocks slide and come under increasing pressure, along with other grocery retailers, since Amazon acquired Whole Foods Market for $13.7 billion in June.
Kroger’s convenience store business employs 11,000 people and generated 62 consecutive quarters of store sales growth.
Mike Schlotman, Kroger CFO, said: “Our convenience stores are strong, successful and growing with the potential to grow even more. 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.”
The announcement comes as Kroger revealed a plan to ‘redefine the food and grocery customer experience in America’, called Restock Kroger.
Considering the current premium multiples for convenience stores, we feel it is our obligation as a management team to undertake this review
This includes redesigning stores to maximise self-service checkouts. It will expand self-service facilities from 20 stores to 400 in 2018.
It will invest in its most popular brands, which it claimed grew by 37% from 2011 to 2017. The retailer will also ‘leverage customer science’ to make space planning decisions, optimise assortment and improve stock.
Schlotman added: “We understand that today’s marketplace is shifting rapidly. Kroger’s success has always depended on our ability to proactively address changes by focusing relentlessly on our customers. We have the scale, the data, physical assets and human connection to win.
“Combining our food expertise and data analytics uniquely positions Kroger to create new and highly-relevant customer experiences, delivered both digitally and in stores. Restock Kroger builds on our strengths and strategically repositions Kroger to accelerate our customer-centred efforts in order to create shareholder value.”
© FoodBev Media Ltd 2018
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