Kroger Co (NYSE:KR) is planning to buy some Marsh Supermarket stores in Indiana.
Kroger Co is buying the stores from an auction for the locations. The company’s successful bid has it spending $16 million to acquire 11 locations. These bidding was done by its subsidiary, Topvalco Inc.
Kroger Co’s bid will need approval from the bankruptcy court judge in Delaware before the acquisition of the Marsh Supermarket stores can be complete. It is likely that KR will reopen these locations under its own banner.
Kroger Co’s decision to buy the Marsh Supermarket stores will give it a strong presence in Downtown Indianapolis. However, it will also face strong competition in the city. This is because rival retailer Fresh Encounter has also bought some locations in the area. This includes 15 locations that it bought at auction for $8 million.
“Frankly, I think Kroger’s activity and investment has contributed to Marsh’s downfall,” Scott Gray, a First Vice President of real estate firm CBRE Group Inc., told Indianapolis Star. “If you look at what Kroger’s done in the past three or four years, I think they just put the nail in the coffin.”
The bidding for the Marsh Supermarket locations is the result of the company filing for Chapter 11 bankruptcy protection last month. This came after it closed 19 of its stores. Marsh Supermarket has a total of 18 stores remaining following the sale at auction to Kroger Co and Fresh Encounter.
KR stock was down slightly as of Wednesday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.
