Kroger buys Home Chef meal-kit maker
NEW YORK -- Kroger, looking to take a bigger bite of the online grocery market, announced Wednesday it is buying meal-kit seller Home Chef.
Home Chef, like other meal-kit companies, sends a box of ingredients and recipes to its subscribers' doorsteps. Kroger will pay $200 million for Chicago-based Home Chef, and may pay an additional $500 million over five years if sales reach certain milestones. Kroger plans to put Home Chef kits in its supermarkets.
Competition among meal-kit companies is fierce. Albertsons bought Plated last year, Walmart is expanding its easy-to-make dinners, and meal-kit company Blue Apron started selling some of its kits in Costco stores. Amazon, which bought Whole Foods last year, also sells its own meal kits.
Kroger Co., which has 2,800 stores, says it expects the deal to close in the second quarter.
-- The Associated Press
New home sales decrease 1.5% in April
WASHINGTON -- Sales of new U.S. homes fell 1.5 percent in April, held down by a shortage of affordable houses in the most desirable areas and a sharp pullback in purchases in the western United States.
The Commerce Department said Wednesday that new homes sold last month at a seasonally adjusted annual rate of 662,000. Despite the setback, new-home sales so far this year are 8.4 percent higher than in 2017.
A solid job market and a shortage of existing homes for sale have led more people into the new home market, even though they are generally more expensive than existing homes. Sales last month occurred disproportionately at the higher end, where profit margins are often greater for builders.
Momentum in the U.S. housing market has overcome even a supply shortage because mortgage rates remain near historic lows. But average mortgage rates have been climbing in tandem with higher rates throughout the economy, reaching a seven-year high of 4.61 percent on a 30-year loan, according to mortgage buyer Freddie Mac.
In April, new-home sales tumbled 7.9 percent in the West and were essentially unchanged in the Midwest and South. Sales improved 11.1 percent in the Northeast. The new-home sales figures are often volatile on a monthly basis and are often revised.
-- The Associated Press
Target sales up, but profit off forecast
MINNEAPOLIS -- Target saw strongest quarterly traffic growth in more than a decade in the first quarter, with a 3 percent sales gain at comparable stores.
But its profit missed analysts' expectations as costs rose from higher employee wages, increased staffing and the greater expense of filling more digital orders.
The company also said the later start to spring delayed sales of high-margin warm-weather items such as outdoor furniture and apparel, but those sales have since picked up more recently.
The Minneapolis-based retailer's net profit was $718 million for the three months ended May 5, a 5.9 percent increase from $678 million a year ago. When adjusted for one-time expenses, it earned $1.32 a share, which was lower than the $1.38 a share analysts were expecting. Target's shares dropped 5 percent in early trading.
Target's revenue in the quarter rose 3.4 percent to $16.8 billion, beating analysts' expectations. Online sales rose 28 percent. The company said it saw broad market share gains across all its core categories and expects to see sales accelerate even further in the second quarter.
-- Tribune News Service
Wind-farm plans unveiled in Northeast
BOSTON -- Massachusetts and Rhode Island have announced offshore wind projects aimed at delivering a combined 1,200 megawatts of energy -- or enough to power 400,000 homes.
The Vineyard Wind project will be Massachusetts' first offshore wind farm and is expected to generate 800 megawatts of energy. That's about 5.5 to 6 percent of the state's total annual electric load.
State officials said that represents the largest single procurement of offshore wind by any state in the nation. Vineyard Wind was selected by Massachusetts over two other offshore wind proposals: Bay State Wind and Deepwater Wind.
Also Wednesday, Democratic Rhode Island Gov. Gina Raimondo said that the state had selected the same Deepwater Wind project proposed for Massachusetts -- a 400-megawatt offshore wind farm Revolution Wind .
Both projects, which the states described as a collaborative effort, will be located south of Martha's Vineyard.
Vineyard Wind said it hopes to begin delivering renewable energy to Massachusetts residents and businesses in 2021. The final acceptance of the bid and award of contract is conditional upon successful contract negotiations.
-- The Associated Press
Slowdown lingering in eurozone survey
LONDON -- A much-anticipated economic pick-up across the 19-country eurozone does not appear to be materializing yet, if one closely-watched survey is anything to go by.
Financial information firm IHS Markit said Wednesday that its purchasing managers' index for the eurozone -- a broad gauge of business activity -- fell in May to an 18-month low of 54.1 points from 55.1 the previous month.
Though any reading above 50 still points to growth, the drop reinforces the argument that a first-quarter slowdown may not have been merely a soft patch. The survey found new order growth slowing and hiring easing, while companies are less optimistic about the future. However, it also indicated that businesses across the bloc were hindered by an unusually high number of public holidays.
"The May PMI brought yet another set of disappointing survey results, though once again a note of caution is required when interpreting the findings," said Chris Williamson, chief business economist at HIS Markit.
Whatever the cause, the survey suggests that second-quarter growth won't beat the first quarter's 0.4 percent. That was down on the 0.7 percent seen during the previous three quarters, which had helped the region expand by a decade-high rate of 2.5 percent during 2017.
-- The Associated Press
Business on 05/24/2018