According to an article from Reuters this past week, Cincinnati based grocer Kroger is interested in acquisitions and has approached Private Brand manufacturers, but some potential targets want too much for their assets.
“People who are selling still have some idea of a big multiple in their head,” Kroger Chairman and Chief Executive David Dillon said on Wednesday at the company’s investor conference, which was webcast.
Executives said that the company would like to buy a plant that produces lower-cost private label goods — which have become more popular in the United States as consumers look to save money — and that Kroger has made a couple of unsuccessful offers, including one that faltered over competitive concerns.
Earlier this month, Kroger reported a better-than-expected fiscal second-quarter profit, fending off stiff competition from the likes of Walmart, Supervalu and Safeway.
Grocers like Kroger, who have beefed up their Private Brand offerings with a wider range of higher quality items, often shrug off price increases from food manufacturers since they make high-margin Private Brands a more attractive option.