USA: Kroger weighs up sale of its $4bn convenience store business
Kroger could sell its $4 billion convenience store business to strengthen its position for a future battle with Amazon and discount retailers in the U.S. grocery sector.
U.S. retailer Kroger has announced its intention to explore strategic alternatives for its convenience store business, including a potential sale. The business consists of 784 convenience stores located across 18 states.
Kroger's convenience store business generated revenue of $4 billion, including selling 1.2 billion gallons of fuel, in 2016.
"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,” said Schlotman in a press release.
Kroger’s shares have jumped 8 points since the announcement was made.
The move comes four months after Amazon shocked the grocery industry by announcing a $13.7 billion merger with Whole Foods. Faced with increased competition from discount retailers like Aldi and newcomer Lidl as well as the structural threat of Amazon, Kroger could decide to channel all its efforts into its supermarket business.
