Kroger Co. (KR) shares were halted for news pending a little after 11 a.m. ET on Wednesday, hours after KR said it's considering unloading its convenience-store business. Shares would resume trading around 11:30 a.m. ET.
Kroger is exploring strategic alternatives for its 784 convenience stores across 18 states, tapping Goldman Sachs for identifying and reviewing strategic options, according to a statement issued at the annual investor conference.
The vertical generated $4 billion in revenue last year, and sold 1.2 billion of fuel. Brands include Turkey Hill Minit Markets, Tom Thumb and QuickStop. Kroger initially misstated the sales figure as $1.2 billion in revenue, resulting in a temporary halt on trading late Wednesday morning.
"We want to look at all options to ensure this part of the business is meeting its full potential. Considering the current premium multiples for convenience stores, we feel it is our obligations as a management team to undertake this review."
The food retailer also unveiled its "Restock Kroger" plan Wednesday, directing its strategic focus to food products and the customer experience.
"People are increasingly becoming more foodie," said CEO Rodney McMullen. "We will partner with our customers for their meals. And it will be anytime, anything, anywhere they want it."
Fighting for survival in the wake of the Amazon.com Inc. (AMZN) acquisition of Whole Foods, Kroger has seen its stock value drop more than 28% year to date, to $21.81 Wednesday morning. The grocery chain reiterated at the investor conference its 2017 projection of slow growth for the rest of the year: 0.5% to 1% growth in identical supermarket sales. It sees slight growth in 2018, projecting that earnings per share will not dip below $1.80.
At the heart of its Restock plan is data. Plans include expanding self-checkout and its "Scan, Bag, Go" pilot program to 400 stores in 2018. The program expedites the checkout process by allowing customers to bag their products as they shop and scan a code before they exit.
Building on its forte in coupons, Kroger will also continue its delivery of personalized recommendations to customers, as well as its sensor network and machine learning networks.
The company now sees 96% of every transaction that goes through stores, the company announced.
"Fundamentally we believe we have one of the best data assets," he said. "Ultimately this drives loyalty to Kroger."
(This story has been updated with news of the trading halt.)
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