CINCINNATI -- There is a "high level of interest" by prospective buyers for Kroger Cos.’ convenience-store business, Mike Schlotman, executive vice president and CFO, said on the Cincinnati-based grocer’s third-quarter 2017 earnings call.
Schlotman and Kroger Chairman and CEO Rodney McMullen offered no additional details or a timetable for the decision.
Kroger said in October that it is exploring strategic alternatives, including a potential sale, for its approximately 780 c-stores under the Turkey Hill Minit Markets, Loaf 'N Jug, Kwik Shop, Tom Thumb and Quick Stop banners in 18 states.
- Kroger's c-store division ranked No. 10 in a year-end update of CSP's 2017 Top 202 list of the largest c-store chains in the United States.
At its annual investor conference in October, Kroger launched Restock Kroger, a plan “to redefine the food and grocery customer experience in America.” It includes the continued rollout of its order-online, pickup-at-store service, ClickList; home delivery; restaurants and ready-to-go meals; cutting food prices; and $3 billion in new-store construction, expansion and remodeling.
The decision to explore alternatives 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 at the time of the announcement.
Selling the c-store business could yield $1 billion to $2 billion that Kroger could reinvest back into its core business, reported USA Today. The company hired Goldman Sachs & Co. to identify, review and evaluate the options.
Kroger reported net earnings of $397 million for third-quarter 2017, a 1.5% increase over $391 million for third-quarter 2016. Total sales increased 4.5% to $27.7 billion in the quarter compared to $26.6 billion for the same period last year.
Kroger has 2,790 retail food stores under a variety of banners in 35 states and the District of Columbia. It has 2,266 pharmacies, 1,480 supermarket fuel centers, 783 c-stores, 306 jewelry stores, 219 retail health clinics and 38 food production plants.
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