Sale of Loaf ‘N Jug creates changes to City Market fuel points program | CraigDailyPress.com

Sale of Loaf ‘N Jug creates changes to City Market fuel points program

Loaf N'Jug in Craig was recently sold by Kroger Co to EG Group. The sale will mean changes in how fuel points are earned.

CRAIG — Customers of City Market and Loaf ‘N Jug stores are facing changes to customer loyalty programs after the recent multi-billion dollar sale of convenience stores and fuel centers owned by Kroger Co. to U.K-based EG Group.

In April, Cincinnati-based Kroger Co. announced it had completed the sale of its convenience store business unit to U.K. based EG Group, also known as Euro Garages, for $2.1 billion.

The deal resulted in the sale of 762 convenience stores, including 66 franchise operations — Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop banners — in 18 states. Combined, the businesses employed 11,000 people and generated sales of $4 billion in 2016.

Convenience stores in Craig, Frisco and Eagle were sold as part of the deal. Steamboat Springs and Breckenridge Loaf ‘N Jug stores were among 21 stores — 10 in Colorado — that were retained by Kroger. Kroger also retains ownership of the City Market store in Craig.

Kroger sent a letter to all its locations, alerting stores and customers that, as a result of the sale, Kroger customer loyalty program members would be able to continue to use fuel points — earned for shopping at Kroger-owned stores — for fuel discounts at the convenience stores and fuel stations now owned by EG Group. However, purchases made inside EG Group stores are not eligible to earn points.

On Tuesday some customers were experiencing problems in having their loyalty cards read by the system. Craig store managers were not allowed to comment on the sale.

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EG Group announced in a news release that it plans to continue to run the 762 newly acquired convenient stores under existing banners, but are expected to invest and transform many of the locations.

This is the first foray into the North American market for EG Group, which is establishing North American headquarters in Cincinnati.

EG Group was founded in 2001 by brothers Mohsin and Zuber Issa and has relationships with national and global retail and convenience brands, including Starbucks, KFC, Texaco, Spar, Carrefour, Burger King and Esso.

“We already have established relationships with many leading U.S. retail brands, and consumers want to access convenient locations to fulfill multiple fuel, convenience store and food-to-go missions and stop at those locations that provide excellent welfare to motorists,” Mohsin Issa wrote in a report by Convenience Store News.

Kroger officials said in a news release the company plans to use most of the after-tax proceeds from the sale to fund a new, $1.2 billion accelerated share repurchase program and the balance to reduce debt.

“Throughout the sales process, we have been impressed with EG Group’s professionalism, commitment to people and understanding of the U.S. convenience retail market,” said Mike Schlotman, Kroger’s executive vice president and chief financial officer. “I can’t stress enough how important to our success Kroger’s convenience store management and associates have been, and we want to thank them for all of their contributions to our customers and our company.”

Contact Sasha Nelson at 970-875-1794 or snelson@CraigDailyPress.com.