October 11, 2017 / 2:09 PM / a year ago

UPDATE 1-Kroger exploring sale of convenience stores, shares rise

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Oct 11 (Reuters) - Kroger Co, the No. 1 U.S. supermarket operator, said on Wednesday it is exploring the sale of its nearly 800 convenience stores, as it revamps its business amid a market share war among traditional and online food retailers.

Kroger shares jumped 6.4 percent to $21.84.

Kroger has 784 KwikShop, Tom Thumb and QuickStop convenience stores in 18 states. They generated revenue of $1.4 billion and sold 1.2 billion gallons of fuel in 2016.

The company, with nearly 2,800 U.S. supermarkets, has been lowering prices and exploring new ways to sell food as it battles rivals such as Wal-Mart Stores Inc, discounters Lidl and Aldi, and the newly merged Amazon.com Inc and Whole Foods Market.

"This is the result of a review of assets that are potentially of more value outside of the company than as part of Kroger," the company said in a statement ahead of its investor meeting in New York. (bit.ly/2g173qv)

Kroger hired Goldman Sachs to help with the review.

Kroger also forecast identical supermarket sales for its full year ending January 2019 to be higher than the current fiscal year, with profit flat or up slightly. (Reporting by Sruthi Ramakrishnan in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Savio D'Souza and Jeffrey Benkoe)

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