US: Kroger closes stores in order to exit market
Cincinnati-based Kroger, the nation's largest operator of traditional supermarkets, is selling four stores in Springfield, Mo., pulling it completely out of that market. The stores are part of Kroger's Dillons chain.
They've been underperforming for a while, Kroger spokesman Keith Dailey said.
"The decision to exit Springfield is a regrettable but necessary step following the regular assessment of our supermarket operations," Sheila Lowrie, a spokeswoman for Dillon Stores spokeswoman, said in a news release.
Springfield, Mo.-based Price Cutter Supermarkets has agreed to buy the Dillons stores' real estate and equipment after Kroger pulls out of the market in January. The two parties did not disclose terms of the deal. Price Cutter has 48 stores in Missouri, Oklahoma and Kansas.
Missouri is not a big market for Kroger. It has just 15 stores in the state, including the Springfield locations.
Kroger last pulled out of a market in 2011. That's when it sold seven stores in Rockford, Ill., to St. Louis-based Schnuck Markets Inc. Rockford and Springfield are virtually the same size.
The closing doesn't make much of a dent in Kroger's empire. It will still have 2,634 stores after the sale is completed. It had 2,640 for a while, but it dropped two during the second quarter that ended in August. Those were either closings that combined two stores into one or a closing for business reasons, Dailey said.
Kroger's operations have been on a roll. It has generated same-store sales growth for an industry-leading 43 consecutive quarters, it has rapidly gained share from Walmart and other rivals, and its stock has jumped 46 percent this year. Cincinnati native and CNBC co-anchor Sara Eisen was in town last week to do a story on Kroger and interview CEO Rodney McMullen about that growth.
Source: bizjournals.com
