retail news in context, analysis with attitude

The Milwaukee Business Journal has a story saying that one retail analyst, Carol Levenson of the bond analysis firm Gimme Credit, believes that Kroger's acquisition of Roundy's is far from a slam-dunk success.

Levenson says that the "fiercely competitive" Chicago and Milwaukee markets "have almost defeated Roundy’s and have defeated other chains before it ... “Although it’s true that Roundy’s has probably been somewhat starved for capital, we question whether its considerable problems can be fixed simply with new ownership and higher investment."

The Levenson letter to investors "questions whether Kroger can turn the company around," the story says, and calls Roundy’s a “struggling” company, "pointing out its same-store sales have fallen or been flat for the last six years. Meanwhile, Kroger has a streak of 47 straight quarters of same-store sales growth."

The Business Journal story goes on: "Analysts and consultants interviewed for last week's cover story on Kroger's acquisition would no doubt dispute Levenson's characterization. Although most have taken a 'wait and see' approach on Kroger's plans not to shutter underperforming stores, the consensus is that Kroger can leverage its formidable supply chain and commendable business practices, as well as returns from that debt refinance, to invest in the struggling stores and turn sales around."
KC's View:
There seems to be a minor debate taking place in the punditry class about whether or not Kroger will close underperforming stores ... the focus seems to be on whether Kroger will replicate the way it dealt with Harris Teeter in that acquisition, or whether it will have to behave differently with Roundy's since it is more of a fixer-upper than Harris Teeter was.

This strikes me as much ado about nothing. The fact is that Harris Teeter and Roundy's are two different companies, so of course there will be differences in how Kroger implements those acquisitions. And, the way Kroger deals with Roundy's Mariano's chain probably will be very different from how it deals with other, less distinctive and successful units.
The one thing I'm pretty sure of is that Kroger will do this right, because that is its history.