CORRECTED-OFFICIAL-Kroger exploring sale of convenience stores, shares rise
Kroger Co said on Wednesday it is exploring the sale of its nearly 800 convenience stores as the No. 1 U.S. supermarket operator strengthens its Web business in a market share war that has intensified after Amazon.com Inc`s purchase of Whole Foods.
Kroger shares jumped as much as 7.3 percent.
Kroger has 784 KwikShop, Tom Thumb and QuickStop convenience stores in 18 states. Kroger said that the business generates $4 billion in annual sales.
The company, with nearly 2,800 U.S. supermarkets, has been lowering prices and exploring new ways to sell food as it battles rivals such as Wal-Mart Stores Inc, discounters Lidl and Aldi, and the newly merged Amazon.com Inc and Whole Foods Market.
"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 in a statement ahead of its investor meeting in New York. (http://bit.ly/2g173qv)
Kroger hired Goldman Sachs to assist with the strategic review.
Kroger reiterated its 2017 net earnings forecast of $1.74 to $1.79 per diluted share. It also said it expects 2018 identical supermarket sales to be stronger than in 2017, when it expects adjusted earnings per share of $2.00 to $2.05.
Cincinnati, Ohio-based Kroger rattled investors in September when it said it would stop providing long-term growth forecasts. It said on Wednesday "it doesn`t see anything in the environment that would cause 2018 earnings per diluted share to be below $1.80."
Kroger shares, which hit a 2017 high of $36.44 before the Amazon-Whole Foods announcement in June, have since tumbled roughly 40 percent. Investors are worried the online retail behemoth`s increased interest in grocery sales could upend the business as it did with books and electronics.
Kroger, for years a leader in using customer data to tailor store offerings and advertising, is responding by testing delivery via Uber, courier service Shyp and its own drivers at more than 150 stores.
It is investing in digital sales through ClickList, an online ordering and curbside pickup service, that is expected to be in more than 1,000 stores by the end of the year.
And it is selling Prep Pared meal kits at more than 50 stores and tapping customer data to generate personalized recipe suggestions on Kroger.com.
The stock was up 2.5 percent to $21.04 in morning trade.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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