NEW YORK — For potential buyers, there may never be a better time to go grocery shopping in the United States.
Kroger, the largest U.S. grocery-store chain and parent of King Soopers, 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.
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 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.
In Colorado, Kroger operates the King Soopers and City Market chains.
“Of the traditional pure-play grocery stores, Kroger is the crown jewel,” David Dietze, president and chief investment strategist at Summit, N.J.-based Point View, which owns shares of Kroger, said in a telephone interview. “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 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.
Food retailers outside the U.S. have bought American grocery chains in the past, and some may be interested in acquiring Kroger if they are seeking further investment in the country as Europe’s sovereign debt crisis threatens its economy, Point View’s Dietze said.
