Kroger plans to explore strategic alternatives for its convenience store business, including a potential sale, as part of its Restock Kroger plan, which is designed to “redefine the food and grocery customer experience in America.”
“Restock Kroger” is a review of assets that are potentially of more value outside of the company than inside.
“Our convenience stores are strong, successful and growing with the potential to grow even more,” said Mike Schlotman, Kroger’s EVP and CFO. “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.”
Kroger’s c-store business includes 784 c-stores located across 18 states. It includes 68 franchise operations. The stores employ 11,000 associates and operate under the following banner names: Turkey Hill Minit Markets, Loaf ’N Jug, KwikShop, Tom Thumb and QuickStop.
Neither supermarket fuel centers nor Turkey Hill Dairy is included in this review.
Kroger’s c-store business generated revenue of $4 billion, including the sale of 1.2 billion gallons of fuel, in 2016. The business unit has delivered 62 consecutive quarters of identical store sales growth.
“Our convenience store management and associates are an important part of our success. They put our customer first every day. We value what they do and thank them for what they will continue to do as we conduct this evaluation,” Schlotman said.
The company has hired Goldman Sachs & Co. to identify, review and evaluate the options.