Fred Meyer South Medford, OR

[pseudo3d]

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.

- The clothing departments in the other-market "Marketplace" stores are still controlled by Fred Meyer. I'm not sure how much volume that department gets (I think that grocery-oriented stores in America have always struggled with the "selling apparel in a grocery store" problem) but I do know that those sections were originally furniture (Ashley Furniture with just junky stuff that didn't look nice, even by Ashley Furniture standards, nor was presented particularly well) and those became clothing. And even if it's low-volume for Fred Meyer I was under the assumption that clothing was a high profit margin thing, which is why the department stores largely sold out to apparel focus years ago. The Kroger Marketplace stores tend to have little clothing in them because they are that small, because once you build out a full supermarket without scrimping on the full service departments (which the discount store supercenters tended to do) there's not a whole lot of space you have to play around with. Not sure what you mean about rural areas...the Kroger Marketplace format with the clothing only tends to show up in larger markets.

- Expanding the Nutrition/organic section shouldn't justify the severe pruning of general merchandise. The customers who have that sort of money probably won't be shopping at Fred Meyer anyway for organics, and if their reason for going to Fred Meyer is the general merchandise selection, then too bad...they'll just head over to Amazon instead. It's definitely a bold move to try to take on general merchandisers and organic retailers simultaneously, but more likely they'll be good at neither.

- This "food first" mindset is I believe one of the causes for deflation in the industry. With drugstores pushing food, Target pushing food, Amazon pushing food, and the increased competition from non-traditional grocers, it puts traditional supermarkets in a bind. The good news for Fred Meyer is that it has something beyond just a traditional supermarket. Like storewanderer said, no other store really has a comprehensive GM/food mix like Fred Meyer does, at least in the area. I've said before that Kmart's grocery department was executed correctly but never built up enough to really stick around for very long. Walmart's mix just isn't very good in food at all, their perishables are sub-par (no meat market, and even full-service delis are uncommon), and the grocery department is poorly merchandised with large displays of generic product and not much selection. Start eroding away the things that make Fred Meyer unique and it will begin to crumble.

[arizonaguy]

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.

- The clothing departments in the other-market "Marketplace" stores are still controlled by Fred Meyer. I'm not sure how much volume that department gets (I think that grocery-oriented stores in America have always struggled with the "selling apparel in a grocery store" problem) but I do know that those sections were originally furniture (Ashley Furniture with just junky stuff that didn't look nice, even by Ashley Furniture standards, nor was presented particularly well) and those became clothing. And even if it's low-volume for Fred Meyer I was under the assumption that clothing was a high profit margin thing, which is why the department stores largely sold out to apparel focus years ago. The Kroger Marketplace stores tend to have little clothing in them because they are that small, because once you build out a full supermarket without scrimping on the full service departments (which the discount store supercenters tended to do) there's not a whole lot of space you have to play around with. Not sure what you mean about rural areas...the Kroger Marketplace format with the clothing only tends to show up in larger markets.

- Expanding the Nutrition/organic section shouldn't justify the severe pruning of general merchandise. The customers who have that sort of money probably won't be shopping at Fred Meyer anyway for organics, and if their reason for going to Fred Meyer is the general merchandise selection, then too bad...they'll just head over to Amazon instead. It's definitely a bold move to try to take on general merchandisers and organic retailers simultaneously, but more likely they'll be good at neither.

- This "food first" mindset is I believe one of the causes for deflation in the industry. With drugstores pushing food, Target pushing food, Amazon pushing food, and the increased competition from non-traditional grocers, it puts traditional supermarkets in a bind. The good news for Fred Meyer is that it has something beyond just a traditional supermarket. Like storewanderer said, no other store really has a comprehensive GM/food mix like Fred Meyer does, at least in the area. I've said before that Kmart's grocery department was executed correctly but never built up enough to really stick around for very long. Walmart's mix just isn't very good in food at all, their perishables are sub-par (no meat market, and even full-service delis are uncommon), and the grocery department is poorly merchandised with large displays of generic product and not much selection. Start eroding away the things that make Fred Meyer unique and it will begin to crumble.

I have not been impressed with the depth, quality, or selection of Kroger's Marketplace apparel departments and I always leave them questioning why they even bother. Almost every time I've wandered into the apparel section I've been greeted with an employee asking me if I need help finding something. I've also noticed I'm almost always the only patron in the apparel area. I purchased some Great Northwest T-shirts and they didn't hold up after a few washes. If I want cheap clothing, Walmart has better quality and pricing.

Fry's has converted several Marketplace stores in Arizona to "food and drug" only stores. Many instances are due to demographics but not always. Some have eliminated the general merchandise to provide expanded organic, natural, and bulk food departments to compete against WinCo and Sprouts.

It's telling that Kroger doesn't view its Marketplace stores as true competitors to more general merchandise focused chains such as Walmart and Target. My local Fry's Marketplace has dozens of Target gift cards for sale (and there's a SuperTarget a few blocks down the street).

[storewanderer]

I don't want to come off as combative or anything, but the type of mindset mentioned above where Fred Meyer is seeing its main competitors as New Seasons, Whole Foods, Trader Joes, etc. rather than Wal Mart or Target is very disturbing. To me, all of those places are competitors to Fred Meyer, yes. However, the problem is in the case of South Medford and in Spokane, Kroger is making the decision to water down or eliminate the one stop shopping format that makes Fred Meyer what it is, and decides to go great guns to just compete with Whole Foods, New Seasons, and Trader Joes at the expense of general merchandise and at the expense of the "one stop shopping" format that Fred Meyer has stood for forever.

The customer who shops at New Seasons, Whole Foods, Trader Joes, etc. is not a loyal customer. They are a transient customer and they will shop at the next new shiny thing with the latest marketing buzz words that opens across the street in a little 30k square foot box and not look back at the large Fred Meyer. This is also a customer who tends to buy less food in general because they eat out more often. I am not saying to ignore this customer because like it has been pointed out, they tend to be high margin, but to completely hang your hat on those customers and say to hell with the loyal customers who have shopped the one stop shop format for decades is a really questionable move.

The clothing program in the Kroger Marketplace format stores is something that I feel could be greatly improved. Why aren't the better brands from Fred Meyer there? Shoes are filled with a ton of off brands plus a few Filas, New Balances, and LA Gears mixed in. Why not get the full Fred Meyer mix in there? Same goes for the clothing category, where are all of the standard brands that Fred Meyer sells? Again it is mostly off brand clothing, a few brands are there, but it is nothing like a real Fred Meyer with Columbia, Dockers, standard Levi's, etc.

For Kroger Marketplace (and Fred Meyer) to be successful, it appears they need an attitude adjustment about the general merchandise. Kroger is a great grocer and great at store operations in general. I believe this is a company that has the resources and knowledge to also get general merchandise right too, if they want to. And I thought that was Fred Meyer's job. But if Fred Meyer is dumbing down general merchandise in its own large 135,000 square foot stores like South Medford and thinking that their competition is now Whole Foods, New Seasons and Trader Joes (only one of which even operates one single store within about 150+ miles of Medford) then it appears priorities are definitely not aligned with a focus on general merchandise.

I buy Target gift cards at Kroger whenever I need to do any significant purchasing at Target. Usually I time it when Kroger has a 4x fuel points on gift cards promotion. This means that I am actually awarded more fuel points to buy Target gift cards than I would to buy purchases at Kroger. I have always thought something was wrong with that picture, but I just go with it.

[pseudo3d]

There is precedent for a 130k square foot store focusing on organics and bulk foods, as Wegmans tends to do. But Kroger Marketplace and Fred Meyer aren't Wegmans, and their merchandise mix is different. (Plus, their perishables are never anything to write home about, but I digress). If Kroger wanted a large supermarket, they should just rebrand it as a really large QFC, not try to muddle Fred Meyer. In terms of general merchandise, there is room for a real third competitor to Target and Walmart, and I believe that Amazon has greatly capitalized on Kmart's failure in the market (or anyone else to step up to the plate, really).

[Super S]

I don't want to come off as combative or anything, but the type of mindset mentioned above where Fred Meyer is seeing its main competitors as New Seasons, Whole Foods, Trader Joes, etc. rather than Wal Mart or Target is very disturbing. To me, all of those places are competitors to Fred Meyer, yes. However, the problem is in the case of South Medford and in Spokane, Kroger is making the decision to water down or eliminate the one stop shopping format that makes Fred Meyer what it is, and decides to go great guns to just compete with Whole Foods, New Seasons, and Trader Joes at the expense of general merchandise and at the expense of the "one stop shopping" format that Fred Meyer has stood for forever.

The customer who shops at New Seasons, Whole Foods, Trader Joes, etc. is not a loyal customer. They are a transient customer and they will shop at the next new shiny thing with the latest marketing buzz words that opens across the street in a little 30k square foot box and not look back at the large Fred Meyer. This is also a customer who tends to buy less food in general because they eat out more often. I am not saying to ignore this customer because like it has been pointed out, they tend to be high margin, but to completely hang your hat on those customers and say to hell with the loyal customers who have shopped the one stop shop format for decades is a really questionable move.

The clothing program in the Kroger Marketplace format stores is something that I feel could be greatly improved. Why aren't the better brands from Fred Meyer there? Shoes are filled with a ton of off brands plus a few Filas, New Balances, and LA Gears mixed in. Why not get the full Fred Meyer mix in there? Same goes for the clothing category, where are all of the standard brands that Fred Meyer sells? Again it is mostly off brand clothing, a few brands are there, but it is nothing like a real Fred Meyer with Columbia, Dockers, standard Levi's, etc.

For Kroger Marketplace (and Fred Meyer) to be successful, it appears they need an attitude adjustment about the general merchandise. Kroger is a great grocer and great at store operations in general. I believe this is a company that has the resources and knowledge to also get general merchandise right too, if they want to. And I thought that was Fred Meyer's job. But if Fred Meyer is dumbing down general merchandise in its own large 135,000 square foot stores like South Medford and thinking that their competition is now Whole Foods, New Seasons and Trader Joes (only one of which even operates one single store within about 150+ miles of Medford) then it appears priorities are definitely not aligned with a focus on general merchandise.

I buy Target gift cards at Kroger whenever I need to do any significant purchasing at Target. Usually I time it when Kroger has a 4x fuel points on gift cards promotion. This means that I am actually awarded more fuel points to buy Target gift cards than I would to buy purchases at Kroger. I have always thought something was wrong with that picture, but I just go with it.

Fred Meyer does offer higher quality on the general merchandise side than a typical Wal-Mart. However the prices reflect that. Some people want the cheapest thing they can get. They also are willing to spend $2 in gas to save 50 cents, as dumb as that sounds. The problem with Fred Meyer's apparel is that prices are just as high as department stores on many items. Sure the quality is there but people expect lower pricing in a big box type of store. Even though the apparel department as a whole has a more upscale look to it.

I don't get the elimination of electronics though especially as chains such as Silo, Circuit City, Good Guys, as well as locals such as Smiths Home Furnishings and Tom Petersons have disappeared. Best Buy is still around but is struggling as is Sears. There are still many who want to see TV's, radios, etc. in person to see how they actually function. Some people are not home during the day and don't like the idea of a new TV sitting out on the porch until you get home.

Fred Meyer has made strides in grocery under Kroger ownership. Kroger is very experienced at running grocery stores. The general merchandise side needs a little more attention though.