NEW YORK – For potential buyers, there may never be a better time to go grocery shopping in the United States.
Kroger Co., the largest U.S. grocery store chain, is trading at an 86 percent discount to its projected sales this fiscal year, leaving it cheaper than 99 percent of companies in the Standard & Poor’s 500 Index, according to data compiled by Bloomberg and released last week.
The Cincinnati-based company, which lost $4.7 billion in market capitalization during the last recession, is now valued at 10.8 times estimated earnings, the lowest level for a U.S. food retailer greater than $2 billion, the data show.
Kroger, which has increased sales in every year since at least 1987 even as Target and Wal-Mart Stores grabbed market share from other supermarkets, may now become a target for retailers outside the U.S. or private equity firms, according to Northcoast Research Holdings.
Valued at $13.7 billion, Kroger could still attract a takeover offer 30 percent above its current price, Point View Wealth Management Inc. said, making it the largest grocery acquisition on record.
“Of the traditional pure-play grocery stores, Kroger is the crown jewel,” said David Dietze, president and chief investment strategist at Summit, N.J.-based Point View, which owns shares of Kroger. “They have a long consistent record of positive same-store sales performance. It’s timely to acquire Kroger because it’s cheap.”
Keith Dailey, a spokesman for Kroger, said the company doesn’t comment on rumor or speculation.
Kroger traces its roots back to 1883, when Barney Kroger used his life savings of $372 to open a grocery store in downtown Cincinnati. Since then, the company has grown to more than 2,000 Kroger supermarkets, selling Kroger brand food items such as ice cream, pasta sauce and fruit juice.
The company, which operates Kroger and the Scott’s Food & Pharmacy stores in Fort Wayne, also operates retailers including the Fred Meyer grocery and department store chain, the Turkey Hill convenience shops and Littman Jewelers.
After losing $4.7 billion in market value during the longest recession since the Great Depression, Kroger has lagged behind a rebound in consumer stocks.
