The Cincinnati Business Courier quotes a Credit Suisse analyst as believing that if Kroger were to acquire Whole Foods - a deal that has been speculated about for some time, even if there has been no concrete evidence that either side has seriously considered it - it would "marry each company’s strengths with the other’s weaknesses, unlock massive cost synergies that could reach 3 percent of Whole Foods sales, help Kroger expand its customer base and possibly provide the growth format it has been eager to develop.”
Edward Kelly is quoted as saying that "an acquisition would give Kroger, the nation’s largest operator of traditional supermarkets, the size and efficiencies to fight off competitors like Wal-Mart as well as newcomers to the food business such as meal kit provider Blue Apron."
“Kroger has reached a crossroads in its strategy, as a decade-plus track record of share gains looks to be ending,” Kelly writes in his analysis. “Kroger now seems to have more incentive than ever to accelerate (mergers and acquisitions) to fill the void of weaker organic growth.”
The Courier story notes that Kelly argues that "Kroger has a strong incentive to buy Whole Foods after its same-store sales declined for the first time in 13 years in the fourth quarter of fiscal 2016."
Edward Kelly is quoted as saying that "an acquisition would give Kroger, the nation’s largest operator of traditional supermarkets, the size and efficiencies to fight off competitors like Wal-Mart as well as newcomers to the food business such as meal kit provider Blue Apron."
“Kroger has reached a crossroads in its strategy, as a decade-plus track record of share gains looks to be ending,” Kelly writes in his analysis. “Kroger now seems to have more incentive than ever to accelerate (mergers and acquisitions) to fill the void of weaker organic growth.”
The Courier story notes that Kelly argues that "Kroger has a strong incentive to buy Whole Foods after its same-store sales declined for the first time in 13 years in the fourth quarter of fiscal 2016."
- KC's View:
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Maybe. But I'm not buying. Not just yet.
Kroger hits one bump in the road, and analysts are ready to throw in the towel on more than a decade of savvy management, organic growth and selective acquisition ... and argue that Whole Foods is the answer to all Kroger's problems.
I know retailers who think this is not the dumbest idea in the world, but I'm not there yet.
