A surge in supermarket takeovers means grocers from Arden Group Inc. (ARDNA:US) to Ingles Markets Inc. (IMKTA:US) may be next in the shopping cart.
Kroger Co.’s bid this month for Harris Teeter Supermarkets Inc. (HTSI:US) helped drive year-to-date acquisitions of North American food retailers to $9.3 billion, the highest since 2006, according to data compiled by Bloomberg. Supermarket operators need to pursue more deals to boost revenue in a slow-growth industry beset by competitors that include discount retailer Wal-Mart Stores Inc., said Wolfe Research LLC, which sees Kroger and Royal Ahold NV as the most active buyers.
“It’s surely an industry that’s needed to be consolidated desperately,” Scott Mushkin, a New York-based analyst at Wolfe, said in a phone interview. “You’re fighting over a pie that’s really just not growing that much, so that does put pressure on some operators” to seek combinations.
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