In a deal expected to be wrapped up by year’s end (central standard time) grocing behemoth Kroger Co. is shelling out $178 million in cash and $14 in coupons to buy Pick ‘n Pay parent Roundy’s, lock, stock, and Chairman Bob and his wells of red ink ($646m), as Roundy’s is getting killed in one of the most competitive markets
in the country (southeast WI). Although Roundy’s leads there in market share by a bunch, that lead is slipping and they lost $8.6m in Q3, er, the 3rd quarter, Mortimer.
Kroger’s top suit declared, “We’re big and flush, as far as you know, so we’re going to invest aggressively in those stores, i.e., slash prices by applying our robust purchasing power, or something.”
Chairman Bob agrees.
“This gives us the opportunity to reassert our position in Wisconsin,” he said.
(What do you mean, ‘us,’ new Kroger employee?)
Kroger top suit also revealed, “But we really lust after that 39 percent market share, and call us slaphappy but we actually see growth opportunity there, so we have no plans to close stores, nudge, nudge, wink, wink.”
Some consultant guy in Waukesha said, “There’s no way Kroger is going to continue to operate low-volume, redundant stores. They don’t do that anywhere.”
That notion was echoed by at least one competitor.
“Kroger is a formidable competitor,” said Pat Fox, owner of the Fox Brothers chain of der Piggles der Viggles supermarkets in southern W. Konsin. “They are very good at what they do.”
That said, even a perfect grocery retailer would be challenged in the region’s market as it now stands, Fox said.
“They still face the same challenges we all face,” he said. “We’re in an over-stored market. You have way too much retail square footage chasing way too few retail dollars.”
But Kroger is not to be bothered with those details on its way to world, er, national dominance. When they bought King Soopers, a store manager said that Kroger “bought us just to correct the spelling.”
The acquisition of Roundy’s ups Kroger’s imperial tally to 2774 grocery stores in 35 states and 38 food processing plants making private label stuff, not to mention their 327 jewelry stores (Fred Meyer, Littman). Don’t mention it.
Kroger also has 781 convenience stores in 19 states under various banners such as Stop-N-Scarf, Stop-N-Slurp,
Stop-N-Crawl Stop-N-Crullers-N-Coffee, Kum & Goes Around & Kums Around, Stop ‘n Go Forth ‘n Multitask, Stop ‘n Get Gas ‘n Fuel Up Too, and Stop-N-Scratch Your, Uh, Scratch Tickets.