CINCINNATI, Ohio, and BLACKBURN, U.K. – The Kroger Co. and EG Group, a privately-held petrol forecourt convenience store retailer based in the United Kingdom, announced a definitive agreement for the sale of Kroger's convenience store business for $2.15 billion. The companies expect to close the transaction during the first quarter of Kroger's fiscal year.
As part of the agreement, EG Group will establish its North American headquarters in Cincinnati, Ohio, and continue to operate stores under their established banner names. Kroger's supermarket fuel centers and its Turkey Hill Dairy are not included in the sale.
“Our convenience store business has been a part of our company for many years. We want to thank our management team and associates for their enduring commitment to our customers, and for the contributions they have made to build our supermarket fuel business,” said Mike Schlotman, Kroger's executive vice president and chief financial officer. “As part of our regular review of assets, it has become clear that our strong convenience store business unit will better meet its full potential outside of our business.”
Schlotman added that one of the most important considerations in Kroger’s decision-making process was continued operations to ensure minimal disruption to its associates. “This is good for our associates across the country and for our headquarter city of Cincinnati. Throughout the process we were impressed with the EG Group's professionalism, investment commitment and more importantly their understanding of the US convenience retail market. We now look forward to working with them closely to ensure a smooth transition for associates.”
Mohsin Issa, EG Group founder and co-CEO, said, “This is an exciting time for EG Group, the entry into the U.S. market presents a fantastic opportunity to deliver a successful retail offer to consumers across the various states. We have had much success across Europe and we firmly believe the Kroger assets present a fantastic foundation to overlay our retail experience and know-how in the U.S. We are committed to investing in the Kroger network, partnering with leading retail brands and working with the exceptional management team and associates transferring across to deliver a comprehensive retail offer."
Zuber Issa, EG Group founder and co-CEO, added, “EG Group is creating a stronger relationship between consumers and leading retail brands they want to access. In the U.S. we aim to create a retail environment which delivers convenience, provides value and serves as a retail destination offering excellent welfare to motorists who live and work near our petrol forecourt convenience retail stores.”
Kroger's convenience store business operates in 18 states and includes 66 franchise operations. The stores employ 11,000 associates and operate under the following banner names: Turkey Hill, Loaf 'N Jug, Kwik Shop, Tom Thumb and Quik Stop. Kroger's convenience store business generated revenue of $4 billion, including selling 1.2 billion gallons of fuel, in 2016.
Read more about EG Group and its European retail business in the NACS Magazine “Global Trends” article, “Halo Effect.”
In 2016, EG Group Co-CEOs and brothers, Zuber and Mohsin Issa, were named European Convenience Industry Leader of the Year at the NACS Convenience Summit Europe. This year’s event is taking place in Warsaw, Poland, and London, England, from June 3-8. Register today or learn more at conveniencesummit.com.