Kroger has reviewed its portfolio and opted to divest its interest in Lucky’s Market.

The retailer announced the move in its third-quarter earnings report.

In 2016, Kroger made a significant investment in Niwot, Colo.-based Lucky’s to accelerate the growth of the specialty grocer. At the time Kroger announced its new partnership with Lucky’s, the chain had 17 stores. As of August, Lucky’s has 39 locations and a new distribution center in Florida.

Lucky’s was founded by two chefs, envisioned as an affordable grocery store for foodies like them. The company’s stores emphasize local and organic fresh produce.

In August, Lucky’s announced it would begin carrying numerous products under Kroger’s organic Simple Truth label. In the news release about that move, Lucky’s described its partnership with Kroger as one that has allowed Lucky’s to improve product quality and reduce prices on many items.

Lucky’s also noted in that release that the new distribution center will allow the company to carry more items, decrease costs and pass savings along to shoppers.



Kroger reported $28 billion in sales for the third quarter, with identical sales up 2.5% and digital sales up 21%.

Chairman and CEO Rodney McMullen described the quarter as a solid one for the company.

“Kroger’s customer obsession and focus on operational excellence continued to generate positive results in the third quarter,” McMullen said in the report. “Identical sales were the strongest since we started Restock Kroger and gross margin rate, excluding fuel and pharmacy, improved slightly in the quarter. At the same time, we continued to reduce costs as a percentage of sales.

“We are using the power of Kroger’s stable and growing supermarket business to create meaningful incremental operating profit through the alternative profit stream businesses, which adds up to a business built for long-term growth that generates consistently attractive total shareholder returns,” McMullen said. “Kroger continues to generate strong and durable free cash flow as reflected by the fact that the company has reduced debt by $1.5 billion over the prior four quarters and continues to increase its dividend to create shareholder value.”


Kroger's Simple Truth brand now available from Lucky's Market

Produce Perspective — Bobby Stokes with Lucky's Market


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