Why did Kroger buy this property in Bradenton?
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Jan 9, 2021

Grocery giant Kroger Co. officially owns some Florida real estate as a result of a failed Lucky's Market development.

Cincinnati-based Kroger paid $5.15 million for a parcel of vacant land that's just under 4 acres in Bradenton in a deal that closed Dec. 22, according to Manatee County property records. The property was previously targeted for Lucky's Market, a specialty grocer that Kroger backed in 2016 and then divested from in 2019. Lucky's closed the majority of its stores within weeks of Kroger pulling out. The developer of the Bradenton Lucky's Market, Los Angeles-based Balboa Retail Partners, filed a lawsuit in Manatee County Circuit Court against Kroger in May 2020, seeking damages as Kroger guaranteed the lease for Lucky's. The property, at 7415 Manatee Ave. W., was previously home to an Albertsons. The Albertsons box was demolished to make way for Lucky's.

But Kroger (NYSE: KR) has been sued by other developers for failed Lucky's Market stores in the Tampa Bay region and hasn't purchased any other real estate as a result. For example, Tampa's own Greenleaf Capital sued Kroger over an abandoned development in Clearwater where Lucky's had signed a lease — but Greenleaf still owns that property, according to Pinellas County property records.

So why does Kroger now own just under 4 acres in Bradenton? The grocer itself won't say; a spokeswoman did not respond to multiple requests for comment. Attorneys for Balboa Retail Partners declined comment.

It's unlikely the grocer has plans for the property, retail real estate observers say. While Kroger is planning to make a splash in Florida with its robot-run warehouse that's under construction near Orlando, that's an entirely different venture from its traditional stores. The robotic warehouse is a fulfillment center for online grocery shopping, and Kroger has partnered with Ocado to open those facilities.

Kroger has only one store in Florida, a Harris Teeter in Fernandina Beach near the Georgia line; that location is the result of Kroger's 2014 acquisition of Harris Teeter. The company has actively avoided the state for years, unwilling to venture into territory controlled by Publix Super Markets Inc., which has both a cult following and cutthroat real estate strategy in its home state.

The Bradenton land purchase is almost certainly more of a defensive move than the signal of an expansion to come, industry experts say. The acquisition was likely an easy way to end the litigation with Balboa, and the grocer will probably enlist a national brokerage firm to list the property for sale.

Then Kroger — other than its robots — can check out of Florida.