Kroger Rumored to buy Whole Foods?

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pseudo3d
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Re: Kroger Rumored to buy Whole Foods?

Post by pseudo3d »

storewanderer wrote:"Bad" is relative. I am referring to if they stop posting sales growth and Wall Street starts pressuring them. How will Kroger react? Will they be happy being a cash cow with stagnant same store sales, focus on more organic expansion to grow overall sales, or what?

Or will they take the Safeway or Albertsons of the 1990's approach when sales soften and start to increase prices more and more to cover up sales losses and keep profit numbers strong?

I hope Kroger is smart enough to be a happy cash cow, even if Wall Street isn't fully happy if and when the same store sales numbers soften, the customers at Kroger are happy.

I hope Kroger has been growing sales for enough years that there is a culture in the company that is focused on sales, and there will be pushback from lower levels if things like scaled back perimeters, price increases, and other moves that will hurt foot traffic start to take place to shore up the numbers for Wall Street.

The other thing about Whole Foods is how could Kroger grow sales at Whole Foods? Lower the prices? Really, Whole Foods prices aren't that bad, for what they sell, they are generally competitive with other stores selling the same items (cheaper than Safeway in NorCal on dairy and non perishables).
If they raised prices, that would be even worse for Kroger rather than just taking a lump and exiting markets, because that situation would allow other companies to dig into them. Albertsons and Safeway could price match without losing their higher prices and other companies like WinCo will be unload both barrels. Plus, when you have a reputation for high prices, that's hard to step back from (such as Whole Foods' case).
storewanderer
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Re: Kroger Rumored to buy Whole Foods?

Post by storewanderer »

Whole Foods reputation for high prices helps the chain. It is part of its image and brand. Trying to be cheap is a complete waste of efforts and resources for Whole Foods and distracts them from what they do best: running stores with a lively vibe, open employee culture, great quality and great tasting products without a ton of additives/high fructose corn syrup, opening in Urban locations that are currently underserved, and bringing in products from smaller vendors.

Trying to "send an image of lower prices" is distracting them and watering down what they do best.

Reno is not exactly an upscale town but the Whole Foods in Reno has been a huge success story from day one. It does well, well over $500,000 a week in sales and that is better volume than any other grocery store in this area does other than Wal Marts and WinCos (though I think a couple Smiths are close to that level now; the other competitors are not close).
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