What’s next for Kroger? Analysts are speculating that two possible acquisitions may be in the works for the retailer. After Rite Aid and Albertsons dissolved their $24 million merger deal earlier this August, and SuperValu reached terms to sell to UNFI late last month, both Rite Aid and Cub Foods—a SuperValu-owned retail banner—have become targets for Kroger, according to the Cincinnati Business Courier.
“I think Cub would be largely incremental to them. I’d say to the extent they’d invest in brick-and-mortar, that might make sense,” Jim Hertel, SVP at Inmar Analytics, told the news source.
Hertel explained that, unlike Kroger’s recent acquisitions, which brought along expertise in growing markets such as online sales and urban, small-format stores, a Cub Foods acquisition would be more about acquiring brick-and-mortar stores.
“In addition to buying those stores they were buying learning opportunities,” he continued. “I don’t know what they learn from Cub.”'
Analysts quoted by the news source suggested that both Rite Aid and the Cub Foods banner could be logical acquisition targets for Kroger.
Other analysts suggest that the strategic value of the acquisition, in terms of the retailer’s footprint, could be enough to entice Kroger.
“With an acquisition of Cub Foods, Kroger would grab a solid share of the grocery market in the Twin Cities,” Investment Manager Zach Horn told the news source.
And Rite Aid’s 4,600 stores around the country could, according to the Business Courier, offer the same enticement, allowing Kroger to expand further into pharmacy, grow its presence nationally, and provide additional benefits of scale.
Kroger declined the Business Courier's invitation to comment on rumors of a potential acquisition.
Is one or several mergers in store for Kroger in the near future? Deli Market News will keep you in the know.