Kroger selling its convenience store, incl. Kwik Shops

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NEW YORK (AP/KWCH) -- British convenience store operator EG Group is buying Kroger's convenience store unit for $2.15 billion as it expands into the U.S.

Kroger and other grocery store operators have been facing tougher competition from companies including Walmart and Amazon. The Cincinnati company has been considering a sale of its convenience store operations since October.

EG Group expects to close the purchase of the Kroger's business unit early this year. The acquisition includes 762 stores, 66 franchises, including Kwik Shop in Kansas, which employ 11,000 workers.

Sheila Lowry, a spokesperson for Hutchinson-based Dillons, a division of Kroger, says the convenience stores will retain their “division banners” – i.e. Kwik Shop will still be called “Kwik Shop”, but it will be owned by EG Group, not Kroger.

Kroger will keep three current Kwik Shop locations because of their proximity to existing stores: Greensburg (which is a hybrid Kwik Shop/Dillon’s store) – one store in Newton – and one in Freemont, Neb. Dillon’s Fuel Centers will not be impacted as they are part of Dillon’s stores and run by Dillon’s employees.

EG Group will base its North American headquarters in Cincinnati, but Lowry says because it does not currently operate in the U.S. There is no staff or infrastructure here, so current Kwik Shop employees should retain their employment, just under a new corporate entity.

It's unknown if there will be a change in fuel rewards, but for now, Lowry says customers can collect and use them at both Dillons and Kwik Shop locations just like always.

The sale is expected to close by mid-May. Kroger plans to use proceeds from the sale to buy back stock and pay down debt.

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