Kroger changes logo at Ruler Foods

Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. No non-grocery posts.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: Kroger changes logo at Ruler Foods

Post by pseudo3d »

wnetmacman wrote: December 30th, 2017, 8:15 am
storewanderer wrote: December 29th, 2017, 11:03 pm Schnucks would be a great fit for Kroger. Their pricing may be a little bit of a problem.

Ruler Foods is a cheap way to enter a market. $2.5 million to develop a new store vs. $30 million (ouch) to develop a Fred Meyer.

As they say you have to spend money to make money but if you can get 12 Ruler Foods that do $125k a week in sales for the same investment as 1 Fred Meyer that probably does $1.5 million a week in sales it seems pretty close. But I am sure margins skew a lot higher in Fred Meyer so the company makes more money with that and that is probably where the ROI challenges come in.
And while we're talking simple economics....

If I'm selling an item that costs me 49 cents for, say 99 cents in my flagship stores (Kroger, FM, etc.), I will sell a certain number of items per week. But say in Ruler, I sell the same item for 69 cents. I will most likely sell three times more there, so while the margin is lower, the overall profit is indeed higher. (50 for one versus 60 for 3). And labor isn't as huge in a smaller store, so it averages out. I think Ruler is a great way to sneak back into places where you once were.

For me, if the prices are better, you could put up a sign that said Turd Foods, and if I can get good food cheap, I'll shop there. In the areas where they're targeting, unemployment is high. When prices are low, that wins over personal preferences any day of the week.
Those "sell more at a lower cost" arguments go away if we're talking slower rural markets. Thinking of the Houston market, there's only two places that Ruler Foods could fit and neither are ALDI markets. San Antonio might work but H-E-B's got a massive grip on the market that could really undercut Ruler Foods. (Lafayette/Baton Rouge could also be another theoretical market). Could it work? Maybe, but they're still pretty risky and it wouldn't be a "cheap way to re-enter a market" if the ROI doesn't work out. All the while, expanding Ruler Foods would be at the cost of maintaining the main market area, and already H-E-B is pretty much neck and neck with Kroger in Houston these days. Additionally, some of Kroger's mileage in Ruler Foods in St. Louis was achieved through TIF zones, and the pre-existing Ruler Foods hanging around the St. Louis metro area to begin with.

And of course, Ruler Foods is all done by JayC, not Kroger, and JayC is already a somewhat "different" division than others, with a heavy focus in more rural stores than the urban-focused chain that others are, so it's expected their different mindset (a willingness to expand into new markets) will factor into that as well.
BillyGr
Store Manager
Store Manager
Posts: 1578
Joined: October 5th, 2010, 7:33 pm
Been thanked: 58 times
Status: Offline

Re: Kroger changes logo at Ruler Foods

Post by BillyGr »

wnetmacman wrote: December 30th, 2017, 8:15 am For me, if the prices are better, you could put up a sign that said Turd Foods, and if I can get good food cheap, I'll shop there. In the areas where they're targeting, unemployment is high. When prices are low, that wins over personal preferences any day of the week.
After all, that idea (offering better prices on items rather than other "accoutrements" to customers) is what was behind a couple of the big growth supermarkets over the years (A&P when the original brothers were still alive and taking Food Town from a few stores to the major Food Lion chain).
Post Reply