Monday proved to be a slow day for economic news, owing to the Martin Luther King Jr. Day holiday. But it was a good day for business rumors.
That might explain rising speculation that grocery giant Kroger Co. of Cincinnati is eyeballing Florida, and possibly the company Bi-Lo/Winn-Dixie, as an acquisition to help push the nation's second-largest supermarket company into the Sunshine State.
So that's the fun buzz. The reality is nobody's suggested anything remotely specific about Kroger entering Florida. What's driving the rumor mill? Let's follow the trail.
"All signs point to management's willingness to make a major acquisition," Carol Levenson, an investment analyst for bond firm Gimme Credit, wrote in a report on Kroger this month. Kroger, with 2,600 stores in 34 states, declined to comment but has said it could handle a large deal without hurting its credit rating.
And Kroger's CEO has recently indicated that the company will enter a new geographic area that it has identified — but will not yet disclose.
All that prompted a report last week in the Cincinnati Business Courier. It noted that for all its size, Kroger lacks stores in Florida, the Northeast and upper Midwest along with a few other places. The Courier hinted of Kroger's interest in Florida back in 2013, too. Cincinnati TV station WCPO also fed the rumor mill with a brief report saying Kroger could be "plotting a Florida invasion."
All that coverage was picked up in recent days by Courier sister publications, including the Tampa Bay Business Journal and other weekly papers in Jacksonville and Miami. These stories added to the chatter, suggesting the Bi-Lo/Winn-Dixie grocery company was a logical target for Kroger's entrance into Florida.
Entertaining. But what do we really know at this point?
If Kroger opts to enter Florida, it faces fierce competition from Publix Super Markets (No. 1 in state market share) and Wal-Mart (No. 2). Smart companies rarely want to be a No. 3 (or less) in big state markets.
Kroger — which also operates in other states under such regional brands as Ralphs, Fry's, King Soopers and Food 4 Less — is second in size to Wal-Mart in the grocery business. Its market value tops $32 billion — that's hefty — and its 2014 revenue exceeded $100 billion. That's more than three times the revenue generated by Publix.
Kroger and Publix already battle head to head in Georgia and parts of the Carolinas, where Publix is aggressively expanding. Kroger recently acquired the upscale Harris Teeter grocery chain for $2.4 billion in the Southeast, adding muscle against Publix.
And if Kroger does buy Bi-Lo/Winn-Dixie to enter Florida as the No. 3 grocer? Floridians win because Kroger's clout will make it a more formidable competitor to Wal-Mart and Publix than the weaker Winn-Dixie chain. And that should mean better choices at lower prices.
Contact Robert Trigaux at email@example.com. Follow @venturetampabay.