As Kroger Co strengthens its online business in a market share war that has intensified since Amazon.com Inc’s purchase of Whole, the No. 1 U.S. supermarket operator said on Wednesday it is exploring the sale of its nearly 800 convenience stores.
Kroger shares was up 3.4 percent at $21.23 in afternoon trading after it had jumped as much as 7.3 percent early in the session.
"This is the result of a review of assets that are potentially of more value outside of the company than as part of Kroger," the company said before its investor meeting in New York. It hired Goldman Sachs to assist with that effort.
A total revenue of $4 billion in annual sales is generated by Kroger through its 784 KwikShop, Tom Thumb, QuickStop and other convenience stores.
As it battles rivals such as Wal-Mart Stores Inc, discounters Lidl and Aldi, and the newly merged Amazon-Whole Foods, its nearly 2,800 U.S. supermarkets have been lowering prices and exploring new ways to sell food.
Its 2017 net earnings forecast of $1.74 to $1.79 per diluted share was also reiterated by Kroger.
Cincinnati, Ohio-based Kroger said on Wednesday “it doesn’t see anything in the environment that would cause 2018 earnings per diluted share to be below $1.80.”
There has bene a fall of roughly 40 percent in the shares of Kroger which hit a 2017 high of $36.44 before the Amazon-Whole Foods announcement in June. As it did with books and electronics, the online retail behemoth’s increased interest in grocery sales could upend the business, investors are worried.
Kroger is responding by testing delivery via Uber, courier service Shyp and its own drivers through 200 stores by year end even though it has been a leader in using customer data to tailor store offerings and advertising for years now.
Executives said that strong growth has been recorded and incremental transactions have been added by its digital sales through ClickList - an online ordering and curbside pickup service where the company is investing. By the end of the year, the service is expected to be in more than 1,000 stores.
In the cities where online grocery delivery is most popular – such as high-density cities such as Manhattan and Boston, Kroger does not have a major presence.
“In the markets we operate in, customers want to engage with us in multiple ways,” Chief Executive Officer Rodney McMullen said.
(Source:www.reuters.com)
Kroger shares was up 3.4 percent at $21.23 in afternoon trading after it had jumped as much as 7.3 percent early in the session.
"This is the result of a review of assets that are potentially of more value outside of the company than as part of Kroger," the company said before its investor meeting in New York. It hired Goldman Sachs to assist with that effort.
A total revenue of $4 billion in annual sales is generated by Kroger through its 784 KwikShop, Tom Thumb, QuickStop and other convenience stores.
As it battles rivals such as Wal-Mart Stores Inc, discounters Lidl and Aldi, and the newly merged Amazon-Whole Foods, its nearly 2,800 U.S. supermarkets have been lowering prices and exploring new ways to sell food.
Its 2017 net earnings forecast of $1.74 to $1.79 per diluted share was also reiterated by Kroger.
Cincinnati, Ohio-based Kroger said on Wednesday “it doesn’t see anything in the environment that would cause 2018 earnings per diluted share to be below $1.80.”
There has bene a fall of roughly 40 percent in the shares of Kroger which hit a 2017 high of $36.44 before the Amazon-Whole Foods announcement in June. As it did with books and electronics, the online retail behemoth’s increased interest in grocery sales could upend the business, investors are worried.
Kroger is responding by testing delivery via Uber, courier service Shyp and its own drivers through 200 stores by year end even though it has been a leader in using customer data to tailor store offerings and advertising for years now.
Executives said that strong growth has been recorded and incremental transactions have been added by its digital sales through ClickList - an online ordering and curbside pickup service where the company is investing. By the end of the year, the service is expected to be in more than 1,000 stores.
In the cities where online grocery delivery is most popular – such as high-density cities such as Manhattan and Boston, Kroger does not have a major presence.
“In the markets we operate in, customers want to engage with us in multiple ways,” Chief Executive Officer Rodney McMullen said.
(Source:www.reuters.com)
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