DISCUSSION
U.K. group has big plans for U.S. after buying Kroger’s c-stores
Written by George Anderson
Photo: EG Group
The Kroger Co. didn’t sell its convenience business to Casey’s General Stores, after all. Yesterday, the company announced it had agreed to sell its business to EG Group, a privately-held convenience retailer based in the U.K., for $2.15 billion.
With the deal, EG (Euro Garages) acquires a business generating roughly $4 billion in annual sales from 762 stores operating in 18 states under banners including KwikShop, Loaf ‘N Jug, QuickStop, Tom Thumb and Turkey Hill Minit Markets. EG plans to keep the headquarters for its new U.S. business in Cincinnati.
"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.,” said Mohsin Issa, co-founder and co-CEO of EG Group, in a statement. “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."
"Our business model is simple but effective — EG Group is creating a stronger relationship between consumers and leading retail brands they want to access,” said Zubba Issa, the other co-founder and co-CEO of EG. “In the U.S. we aim to create a retail environment which delivers convenience, provides value and serves as a retail destination."
EG Group, which generated $14.5 billion in annual sales before acquiring the Kroger properties, currently operates stores in the U.K., France, The Netherlands, Belgium, Luxembourg, Italy and Germany. Between its European and U.S. businesses, EG will own and operate around 4,400 stores. The Issa brothers were both named as the European convenience industry’s “Leaders of the Year” by NACS in 2016. The two began their business with the purchase of a single gas station in England in 2001.
Kroger plans to use proceeds from the sale of its convenience business to repurchase shares and lower its debt. The deal is expected to close by the end of May.