Dive Summary:
- Joe Cahill at Crain's Chicago Business writes that Kroger's $2.44 billion purchase of Harris Teeter bodes poorly for Jewel stores, which Cahill believes could benefit from a Kroger acquisition.
- He notes that Kroger currently doesn't have a foothold in the Chicago market and suffers from "mediocre selection, outdated stores, subpar meats and produce, and low-grade store brands."
- Jewel was acquired by Cerberus Capital Management LP in January, and Bill Bishop, a grocery consultant with the firm Willard Bishop, believes Cerebus will try to flip its 178-store purchase in the future.
Dive Insight:
Kroger is obviously expanding right now. The question is just one of where it really wants to expand to and what kinds of stores it wants. The Harris Teeter buy seems to indicate that the company is focusing on the Southeast and Atlantic coastline. A Jewel purchase would offer a Chicago presence, but it would also mean the acquisition of lesser-quality group of stores, at least compared to the upscale family of stores Kroger will get from the Harris Teeter deal.