Will acquisition of a mom and pop shop pay off big for Kroger?
Kroger, with nearly 2,800 locations, in early February acquired Murray’s Cheese, best known for its famed location on Bleecker Street in NYC.
One surprise is that the acquisition of a New York institution by a national giant failed to cause an uproar. That could be because Kroger had already been partnering with the niche shop. Under a distribution deal launched in 2008, Murray’s Cheese in-store shops are now in more than 350 Kroger locations.
Designed to replicate the Greenwich Village flagship, each in-store shop carries hundreds of cheeses, charcuterie, olives, crackers and specialty food items. Murray’s staff has trained thousands of cheese mongers and “Certified Cheese Professionals” through the Kroger relationship, and is also “deeply involved” with product selection, merchandising and promotions.
Murray’s former owner, Rob Kaufelt, said in a statement, “I’m proud that we’ve been able to maintain the spirit and service of a mom-and-pop neighborhood shop amidst our growth into the national market.”
Mr. Kaufelt will become a strategic adviser. Nick Tranchina will continue to lead Murray’s Cheese. Murray’s Cheese has one other stand-alone location in Grand Central Terminal.
Murray’s Cheese is expected to gain further scale in purchasing and more financial stability. Marking its first New York City location, Kroger taps into widening appeal for artisanal foods. Rodney McMullen, Kroger’s chairman and CEO, stated, “We’re excited to ensure this iconic cheese shop will remain a part of the Kroger family for many years to come.”
Kroger may also see an opportunity to expand the number of Murray’s Cheese stand-alone locations. Kroger opened Main & Vine, a fresh-food urban concept, last year while also recently acquiring Lucky’s Market in Colorado and Mariano’s Fresh Market chain in Chicago.
Still, one cautionary note came from Arlene Spiegel, a restaurant and retail consultant, who told The Wall Street Journal that Murray’s Cheese faces risks preserving its reputation with foodies.
“Several craft soda brands have been purchased by large companies and sold through mainstream distribution channels,” Ms. Spiegel said. “These brands have better market penetration but lost their luster.”
- Kroger and Murray’s Cheese Announce Merger – Kroger
- Kroger Co. Gobbles Up Murray’s Cheese – The Wall Street Journal
- Kroger, Lucky’s Market Ink Strategic Partnership – Progressive Grocer
- Kroger acquires Murray’s Cheese – Cincinnati Enquirer
- Grocery giant Kroger buys Murray’s Cheese flagship store – New York Post
DISCUSSION QUESTIONS: Are national chains such as Kroger becoming better at acquiring niche chains? If so, why? Does Kroger’s acquisition of Murray’s Cheese potentially provide bigger benefits for the buyer or seller?