CINCINNATI, OH - Kroger is on the move. That much has been clear since last October when CFO Michael Schlotman admitted that Kroger had plans to enter a “new market.”
“We’re going into a new market,” Schlotman explained. “We have a really good feel of exactly where that’s going to be. But we want to make sure the time’s right for the organization, because we have 2,650 stores that we don’t want to get distracted from every day just to say we’ve gone into a new market organically.”
His comments have given rise to rampant speculation that a Roundy's purchase could be high on Kroger's to-do list. As the Milwaukee Business Journal points out, Kroger could gain a valuable foothold in the Chicago and Milwaukee retail markets through Roundy's, points which are surely not lost on CEO Rodney McMullen.
Some analysts, however, wonder if Kroger would prefer to avoid the ultra-competitive Milwaukee retail market, in favor of greener pastures to the southeast.
"We all know how competitive Milwaukee is becoming," shared retail analyst and President of DSR Marketing Systems, David Rogers. "Do they want to get into that firefight?"
He explained to the Milwaukee Business Journal that while he believed Kroger could certainly hold its own in the Milwaukee market, “on balance, if I was Kroger, I'd be looking at the southeast."
As for Chicago, former Roundy's executive and current grocery consultant David Livingston shared that he thought a potential deal was unlikely at best. Furthermore, it would seem that without Chicago, a deal for the Milwaukee store base would be difficult to achieve.
"Kroger will not buy distressed stores just to get into a market," Livingston said. "They are slow and methodical about entering any new market. Just because they aren't [in a given market] doesn't mean they have to expand."
Earlier this month, AndNowUKnow covered rumors that Kroger could also be considering an acquisition of a portion of Bi-Lo's Florida store chain. As the 3rd most populous state in America, Florida could offer exciting possibilities for the retail chain.
Whether either of these rumored plans materialize into something concrete or remain in the realm of speculation is something that remains to be seen. Stay tuned to AndNowUKnow as we continue to bring you the latest on the developing situation.
