Fred Meyer South Medford, OR

[storewanderer]

This store is currently being remodeled into the new "limited non food" format.

They have completely killed the non food areas of the store. They have spread food out into the areas that once housed furniture, rugs, seasonal, paint, garden. For some reason they moved the Pharmacy across from the clothing checkouts where electronics used to be (???) instead of across from the self checkouts.

Categories such as auto, hardware, etc. are down to 2 or so aisles TOTAL.

The food aisles are now very wide and have many, many facings of the same item. The food aisles are also very long now and there is no split down the middle. The nutrition department is expanded and still its own department, but again, has items spread out more over the shelves than before.

So what did Kroger accomplish here? This is probably the worst store remodel I've ever seen done by any chain, anywhere. It isn't done yet but the damage is done to the general merchandise areas and to the grocery center store.

They:

1. Eliminated the product depth in general merchandise that Fred Meyer is very known for, and has centered its marketing around ("What's on your list today?" or "You'll find it at Fred Meyer").
2. Expanded the space that food takes and made it way harder to find items due to aisles no longer being split down the middle and due to spreading the department out over so much more space than before.

The good thing is there is a Wal Mart right across the street and it has a full general merchandise mix still. Late last night the Fred Meyer had ~30 cars in its parking lot and the Wal Mart had well over 100 cars in its lot. There is also a WinCo right across the street for lower priced groceries and that store too was MUCH busier than Fred Meyer last night.

If this remodeling plan continues across more stores, we are witnessing the death of the unique Fred Meyer format. This is very sad.

[marshd1000]

I was recently in the remodeled Bellevue, WA Fred Meyer. It was a old White Front like the Burien store was. They gutted it and even added onto the building. They did increase the amount of space for food with a bar and pizza etc. But they did NOT decrease the size of the general merchandise. So I am hoping that what has happened in Spokane and Medford will just be a fluke. I am hoping more of a Bellevue model, which is truer to the Freddy's format, will be the way forward!

[storewanderer]

In Medford, the Crater Lake Highway Store is untouched. I actually went into that one first. I was, as usual, impressed by the depth and general mix in the Fred Meyer non foods departments. I was not impressed by what seemed like pretty high grocery prices, especially on fresh items. Albertsons/Safeway sure has a lot of promotions that are beating Fred Meyer... haven't seen that in years. Fred Meyer is still priced pretty good on dry grocery but again, Albertsons/Safeway has promotions in quite a few categories there that beat Fred Meyer too.

The South Medford Fred Meyer is a sad, sad place. Although the remodel is still in progress and the store is still very much shoppable from a grocery perspective, customer count is not even close to a typical Fred Meyer. WinCo and Wal Mart nearby are so, so much busier. There is construction stuff all over the hardlines/garden side parking lot. The clothing entry door has little traffic. The food entry door is the only entry with any significant amount of traffic.

The more I think about this, the more I think what a stupid idea this was. South Medford feeds as the shopping destination for Ashland, Phoenix, Talent (all of which have no major general merchandise stores unless you count a couple Rite Aids), and even down into California (to avoid sales tax). Fred Meyer taking so much general merchandise out of this store is just flat out walking sales to various competitors.

The other issue in Medford is there is the pesky competitor Sherm's Thunderbird and Sherm's Food 4 Less. These stores are very popular and very well priced and well assorted. Sherm's Food 4 Less had 7 checkouts going last night at 9 PM. I know it was the first of the month, but still... I always felt in Medford, Fred Meyer competed on mix particularly depth of general merchandise and food and a little on quality/store appearance vs. Sherm's.

I am not sure if Fred Meyer considers Spokane and Medford to be throw away markets or what, but what they are doing here killing the "one stop shopping" format is a fatal error.

[pseudo3d]

In Medford, the Crater Lake Highway Store is untouched. I actually went into that one first. I was, as usual, impressed by the depth and general mix in the Fred Meyer non foods departments. I was not impressed by what seemed like pretty high grocery prices, especially on fresh items. Albertsons/Safeway sure has a lot of promotions that are beating Fred Meyer... haven't seen that in years. Fred Meyer is still priced pretty good on dry grocery but again, Albertsons/Safeway has promotions in quite a few categories there that beat Fred Meyer too.

The South Medford Fred Meyer is a sad, sad place. Although the remodel is still in progress and the store is still very much shoppable from a grocery perspective, customer count is not even close to a typical Fred Meyer. WinCo and Wal Mart nearby are so, so much busier. There is construction stuff all over the hardlines/garden side parking lot. The clothing entry door has little traffic. The food entry door is the only entry with any significant amount of traffic.

The more I think about this, the more I think what a stupid idea this was. South Medford feeds as the shopping destination for Ashland, Phoenix, Talent (all of which have no major general merchandise stores unless you count a couple Rite Aids), and even down into California (to avoid sales tax). Fred Meyer taking so much general merchandise out of this store is just flat out walking sales to various competitors.

The other issue in Medford is there is the pesky competitor Sherm's Thunderbird and Sherm's Food 4 Less. These stores are very popular and very well priced and well assorted. Sherm's Food 4 Less had 7 checkouts going last night at 9 PM. I know it was the first of the month, but still... I always felt in Medford, Fred Meyer competed on mix particularly depth of general merchandise and food and a little on quality/store appearance vs. Sherm's.

I am not sure if Fred Meyer considers Spokane and Medford to be throw away markets or what, but what they are doing here killing the "one stop shopping" format is a fatal error.

Hopefully Kroger realizes its mistake and remerchandises it so it can regain its popularity. With Walmart keeping a complete general merchandise mix and Albertsons/Safeway competitive on prices it starts to erode Fred Meyer's base and the death of a retailer comes when there's no compelling reason to go there over its competitors. At least no Fred Meyer has physically downscaled (like sub-leasing parts of a 200k+ building) yet...

[storewanderer]

This South Medford Fred Meyer is on the small end as far as Fred Meyer Stores go, it is about 130,000 square feet. WinCo is right across the street and Wal Mart is about a block away with a pretty new Supercenter.

It isn't really a neighborhood location and accessing the store requires going through multiple stop lights due to the way the streets are laid out. It is a destination store and to me that adds support for the case that it should have a full line of general merchandise. Kroger does not know what they are doing. This move demonstrates zero understanding of the Fred Meyer format, its location type and what customers go to those locations, etc.

Kroger seems to be treating the west coast very poorly. Few to no new stores. This sort of remodel such as what was done in Spokane or what is being done to South Medford where stores get dumbed down and lose merchandise is the polar opposite of what Kroger is doing in its non-west coast territories.

Meanwhile in other territories Kroger builds Marketplace Stores. Expanding their product categories and adding more items in an effort to capture more spending from customers. The Marketplace Stores are an upgrade in every way vs. Kroger's non-marketplace product in those non-west coast markets. They have a better perimeter, better mix throughout the store, and the addition of the smaller general merchandise categories is another addition.

I was always hoping the Marketplace stores were a "bridge" between going from a grocery store to a full Fred Meyer format in many Kroger markets.

Unfortunately it appears the Marketplace format is going to be kept as it is and they now want to just dumb Fred Meyer down to that format.

Marketplace Stores are great (if you forget what a full Fred Meyer is like) but they are no full line Fred Meyer.

[Super S]

The Fred Meyer "marketplace" stores with limited general merchandise (not to be confused with the new Kroger Marketplace stores) in Portland/Vancouver have had mixed results. Some do ok as they do a strong grocery business, but others see sales drop when merchandise is scaled back. I know of one (Rockwood) that closed with no replacement, one (4th Plain) that was replaced by a full Fred Meyer (Grand Central), and one (Hazel Dell) that brought back a small apparel section. All of the conversions were smaller, older stores which also had separate home improvement buildings. This format only seems to work in more heavily populated areas where Fred Meyer also has a full line store not too far away.

With this and what they are doing in Spokane, I am wondering why they are trying to tweak the formula as Fred Meyer is still a strong performer in most areas.

[pseudo3d]

This South Medford Fred Meyer is on the small end as far as Fred Meyer Stores go, it is about 130,000 square feet. WinCo is right across the street and Wal Mart is about a block away with a pretty new Supercenter.

It isn't really a neighborhood location and accessing the store requires going through multiple stop lights due to the way the streets are laid out. It is a destination store and to me that adds support for the case that it should have a full line of general merchandise. Kroger does not know what they are doing. This move demonstrates zero understanding of the Fred Meyer format, its location type and what customers go to those locations, etc.

Kroger seems to be treating the west coast very poorly. Few to no new stores. This sort of remodel such as what was done in Spokane or what is being done to South Medford where stores get dumbed down and lose merchandise is the polar opposite of what Kroger is doing in its non-west coast territories.

Meanwhile in other territories Kroger builds Marketplace Stores. Expanding their product categories and adding more items in an effort to capture more spending from customers. The Marketplace Stores are an upgrade in every way vs. Kroger's non-marketplace product in those non-west coast markets. They have a better perimeter, better mix throughout the store, and the addition of the smaller general merchandise categories is another addition.

I was always hoping the Marketplace stores were a "bridge" between going from a grocery store to a full Fred Meyer format in many Kroger markets.

Unfortunately it appears the Marketplace format is going to be kept as it is and they now want to just dumb Fred Meyer down to that format.

Marketplace Stores are great (if you forget what a full Fred Meyer is like) but they are no full line Fred Meyer.

I believe that there is such a thing as Fred Meyer Marketplace, a smaller format Fred Meyer that has existed well before the Kroger merger, and that 130k square feet is just about right for a lot of the new-build "Marketplace" stores in the core Kroger markets (Ohio, Fry's, Texas, King Soopers). But to damage the core Fred Meyer name like that isn't a smart idea, especially how it's the merchandising (I imagine) that sets Fred Meyer apart from QFC, which overlap in several markets.

I do know that Kroger killed the idea of Fred Meyer expanding full-size stores outside of the northwest...they rebranded the Smitty's Marketplace stores (just rebranded to that name) to "Fred Meyer Marketplace" in Arizona and actually built a full Fred Meyer store (though they never opened it). The Fred Meyer that was never opened was eventually demolished for a Walmart Supercenter and today from what I've heard isn't a great neighborhood either way. But after the merger, Fred Meyer Marketplace in Arizona was merged with the Fry's name and the Fred Meyer stores never came.

The Fred Meyer "marketplace" stores with limited general merchandise (not to be confused with the new Kroger Marketplace stores) in Portland/Vancouver have had mixed results. Some do ok as they do a strong grocery business, but others see sales drop when merchandise is scaled back. I know of one (Rockwood) that closed with no replacement, one (4th Plain) that was replaced by a full Fred Meyer (Grand Central), and one (Hazel Dell) that brought back a small apparel section. All of the conversions were smaller, older stores which also had separate home improvement buildings. This format only seems to work in more heavily populated areas where Fred Meyer also has a full line store not too far away.

From what I've heard, in the Marketplace stores with no Fred Meyer in the market, the general merchandise section is almost a ghost town, and I think that's a common trend among grocery stores that try limited GM, is that the merchandise mix just isn't compelling enough (or cheap enough) to really create volume that the GM side needs, and despite being a draw, it's the grocery side that pushes the store along. It's been almost five years since I last set foot in a Marketplace store of any type, and I certainly haven't been to the one discussed in this topic.

Question--was this store doing particularly poorly in the GM department that given the size of the store, it made sense financially to remerchandise it?

[storewanderer]

I think most Fred Meyers struggle a little on general merchandise... but you have to look at the total package. If having the full lines of non food gets you the customer's food cart too, then that $8 of general merchandise sales led to $75 of food sales. Take away the general merchandise and will you keep that food cart? Maybe, but maybe not...

To me, dumbing down the Fred Meyer format like what I saw in South Medford is almost akin to what Albertsons did to Lucky in 1999. If you are going to basically destroy a store and a format, which is what Kroger is doing in South Medford, maybe you should just change the name too. Because this store is not a Fred Meyer. It is a poor use of space.

The Fred Meyer Marketplace Stores with limited general merchandise around Portland are smaller boxes (well under 100,000 square feet) and very clearly marked as Marketplaces, with limited general merchandise.

Also while we are at it, why doesn't Fred Meyer sell any general merchandise online? At least if they offered online sales they could refer customers looking for general merchandise in these small stores or stores they have opted to dumb down like South Medford an option to "order online and pick up in store." This is another pretty major area where Kroger has really missed the boat.

I simply cannot believe the missteps of Kroger this year. Their merchandising strategy has literally nosedived.

[babs]

There is a lot of misinformation in this thread. First of all, I am not employed by Fred Meyer but am very familiar with their operations.

If you look around the Portland market they have been remodeling many stores to expand the food department with additional space for Nutrition (in most cases doubling the size of it) and allocating more space to wine and beer. They are doing this because they no longer view Walmart and Targets as threats. Rather they view New Seasons Market, Whole Foods, Market of Choice and others in this fast growing space as their biggest threat. Losing customers who have the $$$ to buy organic, natural is a bigger threat than anything else. They want to do everything to hold on to these high value customers.

Most Fred Meyer stores are in the area of 135-175k sq ft. So they feel they have the space to expand grocery while pruning general merchandise and not losing the one stop shopping concept. They have been getting killed on the electronics front. Clothing generally only works in more rural areas (that''s why Kroger Marketplace stores have so little clothing, it's just not profitable for them). They lost the hardware and paint business years ago to Home Depot and Lowes.

You may not like the changes but it's based on the reality of the market they compete in. Food first. General merchandise is there to support the food business. Fred Meyer had evolved over the years. They killed home improvement centers when home depot took over the market. They've cut back in other areas as the competition has evolved. Sitting on your hands and watch someone else eat your lunch just guarantees that you will go out of business down the road.

[storewanderer]

The electronics category is one that has simply gone through a lot of changes over the years, I don't necessarily fault cutting that one out... it has been low margin for a long time and more and more items sold in the category are obsolete.

I disagree with the idea of sacrificing GM and focusing fully on food. They should have teams in place to focus on both areas and focus hard on both areas.

The way the stores are configured (separate entry for food, clothing, and GM), allows a very unique situation where each area can basically act as its own little store capturing it's own customer.

The one stop shopping concept has been killed at South Medford. This is not a case of prunimg GM to enhance food. This is far more serious. Target has a better hardlines mix than the reconfigured South Medford Fred Meyer has. That is the central point of my dissatisfaction.

There are a lot of people selling food. There aren't a lot of people with a quality food program and a quality, deep GM mix under one roof which is what the Fred Meyer format is.

Also if clothing is so low profit, why have they been reconfiguring the various Marketplace stores to add clothing over the past couple years? I do not disagree with your assertion that clothing has issues, just wonder why they are adding it lately...