Kroger Concludes Sale Of Turkey Hill To Peak Rock Affiliate

The Kroger Co. (NYSE:KR) successfully concluded the sale of Turkey Hill to an affiliate of Peak Rock Capital. The proceeds from this deal will be utilized to lower the company’s debt level, which stands at $15,229 million as of Feb 2, 2019.

Last August, the company had announced its plans to divest Turkey Hill business. In line with the same, it inked a definitive deal worth $215 million with Peak Rock Capital in March 2019. It was earlier notified that post this divestiture, Turkey Hill business will continue to operate from its Conestoga, PA location under its own brand name. Additionally, all 800 full-time, part-time and seasonal associates of Turkey Hill will be retained.

Turkey Hill, which is part of Kroger’s Our Brands (owned brands), is one of the company’s popular ice-cream brands. Apart from ice creams, Turkey Hill produces a complete line of popular iced teas, fruit drinks, milk and other frozen desserts.

This move is in sync with the company’s plan to narrow its non-grocery footprint and make investments in expanding the grocery offerings and e-commerce presence. In this regard, the company divested its convenience stores to U.K.-based EG Group in April 2018.

The company is aggressively working toward enriching customers’ shopping experience via innovations and enhancement of e-commerce capabilities. To this end, Kroger partnered with the British online grocery delivery company, Ocado (LON:OCDO), and expanded its Home Chef Express meal kits nationwide.

Apart from these, the company started using Nuro’s fully autonomous driverless vehicles for grocery delivery services. Additionally, it launched Kroger Pay, a mobile payment app. The company also partnered with Microsoft (NASDAQ:MSFT) to use Azure, its most preferred cloud platform for Retail as a Service (RaaS) — a Kroger solution.

The above-mentioned strategies are in response to stiff competition from the company’s rivals, namely Walmart (NYSE:WMT) , Target (NYSE:TGT) and Amazon (NASDAQ:AMZN) that are increasing investments in the grocery space. We note that although this Zacks Rank #3 (Hold) stock has declined 9.7% in the past three months, it has gained 4.5% in the past 30 days, outperforming the industry’s growth of 3.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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