Could Kroger be preparing for a Florida move-in?

[arizonaguy]

That's why I was thinking (along with pseudo3d) that Schnucks and/or Giant Eagle would make more sense.

That's why I didn't mention them. They're both operating at a much higher level than SaveMart or Winn-Dixie. Giant Eagle stores average more than $750,000 a week, maybe even closer to $800,000 now, and they're privately owned. Schnuck's is also privately owned and neither owner has given any indication they're interested in selling as far as I know.

I doubt Kroger would want Save Mart but in much of Save Mart's territory they simply have Safeway to contend with (and a much weaker Walmart presence than pretty much anywhere else in the country).

There are two sides of SaveMart. There's the smaller Lucky brand that operates in the bay area. This is where their best real estate is and very little low price competition. But the heart of SaveMart's operation is in the Central Valley where real estate is cheap and they compete heavily with WalMart, Food4Less and the various Latino chains. Those stores are in terrible shape for the most part and are pretty much low volume neighborhood stores. Those stores are similar to the bulk of smaller stores Stater Bros. operates in the Inland Empire except they don't enjoy a reputation for every low prices and good customer service like SB.

Unlike Albertsons, Kroger has the resources to engage in a wide-spread organic expansion effort. If Kroger was willing to not be #1 initially, they could force their way in to Florida via the one-store-in-Florida Harris Teeter and avoid the suspicions that come with purchasing a smaller company. With a more upscale appearance than the typical stock-and-trade Kroger stores, they could eat Albertsons' lunch by buying up real estate and destroying the viability of W-D stores Albertsons may have had their eye on, as well as attracting a customer based starved for another real option. They could damper any plans Albertsons had to "repopulate" the area, destroy Winn-Dixie, and put the heat on Publix, all in one fell swoop.

I honestly think that Kroger should follow this strategy but not in Florida but in Austin. Kroger could damper any plans Albertsons/Safeway have for Randalls and put the heat on H-E-B. It would be the perfect retaliation for any H-E-B encroachment in Dallas.

[pseudo3d]

That's why I didn't mention them. They're both operating at a much higher level than SaveMart or Winn-Dixie. Giant Eagle stores average more than $750,000 a week, maybe even closer to $800,000 now, and they're privately owned. Schnuck's is also privately owned and neither owner has given any indication they're interested in selling as far as I know.



There are two sides of SaveMart. There's the smaller Lucky brand that operates in the bay area. This is where their best real estate is and very little low price competition. But the heart of SaveMart's operation is in the Central Valley where real estate is cheap and they compete heavily with WalMart, Food4Less and the various Latino chains. Those stores are in terrible shape for the most part and are pretty much low volume neighborhood stores. Those stores are similar to the bulk of smaller stores Stater Bros. operates in the Inland Empire except they don't enjoy a reputation for every low prices and good customer service like SB.

Unlike Albertsons, Kroger has the resources to engage in a wide-spread organic expansion effort. If Kroger was willing to not be #1 initially, they could force their way in to Florida via the one-store-in-Florida Harris Teeter and avoid the suspicions that come with purchasing a smaller company. With a more upscale appearance than the typical stock-and-trade Kroger stores, they could eat Albertsons' lunch by buying up real estate and destroying the viability of W-D stores Albertsons may have had their eye on, as well as attracting a customer based starved for another real option. They could damper any plans Albertsons had to "repopulate" the area, destroy Winn-Dixie, and put the heat on Publix, all in one fell swoop.

I honestly think that Kroger should follow this strategy but not in Florida but in Austin. Kroger could damper any plans Albertsons/Safeway have for Randalls and put the heat on H-E-B. It would be the perfect retaliation for any H-E-B encroachment in Dallas.

Well, like I don't know about Harris Teeter and its operations, but I can tell that Southwest isn't going to win any prizes in many of its stores. Southwest technically doesn't exist anymore, it broke into Houston and Dallas divisions, because they had two DCs (one in Houston, one in Dallas) and after about a radius of 80 miles from Houston, Kroger stores disappear. Even if Kroger did succeed in that, land use and land value in Austin would complicate things (Florida doesn't seem quite as picky on those things), because all of the existing chains or recently deceased chains were all from another's labor or they entered early. H-E-B has been there for years, Albertsons (before they pulled out) gained entry or at least a foothold by buying some Tom Thumb stores and Randalls got in by buying up the Austin AppleTree stores, which were all former Safeway stores. In any case, there's no other stores to build off of--the closest store would still be 90 miles away. Unlike H-E-B (which has strong market shares in every city in the Texas Triangle BUT Dallas where there are none, plus a few token stores miles west of I-35) and Albertsons (strong Dallas market share, weak Houston market share, less weak Austin market share, scattered stores in markets west of I-35 and the Texas Panhandle), Kroger has strong market shares in Houston and Dallas (and within a <100 mile radius) but almost nowhere else.

[storewanderer]

The new build marketplace stores in Southwest Kroger are excellent operations, very popular, and very high volume stores. This format could be used for an organic expansion into Austin. However, I don't think an organic expansion to Austin is the right idea nor do I think an organic expansion to Florida is the right idea. They have little to no shot at even 2nd place marketshare in either market anytime soon and it would take so much capital to get there. I think there is lower hanging fruit to expand into that would be cheaper and have fewer barriers to entry.

[wnetmacman]

The new build marketplace stores in Southwest Kroger are excellent operations, very popular, and very high volume stores. This format could be used for an organic expansion into Austin. However, I don't think an organic expansion to Austin is the right idea nor do I think an organic expansion to Florida is the right idea.

Kroger has been to Austin. There are two abandoned Family Centers there to show for it. Short of an acquisition, they would probably not go back, as they typically don't return once they leave.

I do, however, believe they could take Florida if they tried. It may take a few years, which they may not be willing to invest. They may also have to do it with the Marketplace stores. I don't believe anyone is going to fully beat Publix with conventional supermarkets. There will have to be a niche. Kash & Karry/Sweetbay couldn't do it. Winn Dixie is content with being #2 (and I mean that both ways it sounds). The Harris Teeter purchase *may* be a way for them to test the waters with the single store. We'll just have to wait and see. And that one store is, from looking at both Google and Live maps, pretty small. Here's the map to show:

Google Maps Image

Live Maps Bird's Eye

[arizonaguy]

The new build marketplace stores in Southwest Kroger are excellent operations, very popular, and very high volume stores. This format could be used for an organic expansion into Austin. However, I don't think an organic expansion to Austin is the right idea nor do I think an organic expansion to Florida is the right idea. They have little to no shot at even 2nd place marketshare in either market anytime soon and it would take so much capital to get there. I think there is lower hanging fruit to expand into that would be cheaper and have fewer barriers to entry.

I've heard rumors on other forums about a re-entry into Kansas City.

The markets that seem most logical for Kroger to enter (or re-enter) seem to be: Cleveland, Kansas City, Oklahoma City, Pittsburgh, St. Louis, or Tulsa.

Oklahoma City and Tulsa probably have the least barriers to entry (yet Albertsons seemed to fail there). Kansas City probably has enough greenfield space on its suburban fringes to allow for an organic Dillons Marketplace expansion. Cleveland, Pittsburgh, and St. Louis would have to be aquisition (in St. Louis Schnuck's would be perfect if they wanted to sell (their latest decor even looks strikingly similar to Kroger's newest stores: http://www.cipretail.com/portfolio/schnucks/)) and in Cleveland and Pittsburgh Giant Eagle also seems to be a successful chain with Krogeresque stores: http://www.aionsolutions.com/case/giant-eagle/

[storewanderer]

Schnuck's would be a great buy for Kroger. Very similar stores to some of the better Kroger divisions (like Fred Meyer).

OKC and Tulsa are probably not attractive anymore since WinCo is moving into Oklahoma. That will shake things up. Wal Mart owns those markets. The independents/regionals are low volume operations. Save for some Reasors around Tulsa and Crest in OKC. If Kroger wanted into those markets they needed to buy the Albertsons Stores that went for sale (OKC store base was in a lot better condition than Tulsa). Kansas City has some well run chains with Hy Vee, Hen House, and some of the Price Choppers being nice stores. Add in a Sprouts presence, Whole Foods presence, and I am not sure how much room there is there for Dillons. Dillons had a few stores on the fringes of Kansas City but closed them in 2005. Dillons is not a bad store but feels pretty uninspired. I am not sure that division has the DNA to pull off much of an organic expansion. Dillons exited Springfield, MO within the past couple years for no real reason other than a flat out lack of wanting to try; the competition there (Price Cutter) is horrrrrrrible.

Save Mart. I don't think so. Just too troubled. Too capital starved. Their stores are just... sad. Lifeless. Dead. They need money. Lots of money. And total remerchandising.




NorCal is a high cost market and it is hard to turn a profit even on moderate-high volume stores. That was part of why Albertsons LLC got out of there. Fast. Raleys would actually be a better Kroger acquisition in NorCal than Save Mart. Raleys is already copying Kroger in a lot of ways namely Que Vision and Dunhumby loyalty. Raleys also has mostly large well maintained stores and steadily remodels a few stores every year. Raleys goes all out on its remodels, too; no cheap remodels there.

[pseudo3d]

The new build marketplace stores in Southwest Kroger are excellent operations, very popular, and very high volume stores. This format could be used for an organic expansion into Austin. However, I don't think an organic expansion to Austin is the right idea nor do I think an organic expansion to Florida is the right idea.

Kroger has been to Austin. There are two abandoned Family Centers there to show for it. Short of an acquisition, they would probably not go back, as they typically don't return once they leave.

I do, however, believe they could take Florida if they tried. It may take a few years, which they may not be willing to invest. They may also have to do it with the Marketplace stores. I don't believe anyone is going to fully beat Publix with conventional supermarkets. There will have to be a niche. Kash & Karry/Sweetbay couldn't do it. Winn Dixie is content with being #2 (and I mean that both ways it sounds). The Harris Teeter purchase *may* be a way for them to test the waters with the single store. We'll just have to wait and see. And that one store is, from looking at both Google and Live maps, pretty small. Here's the map to show:

Google Maps Image

Live Maps Bird's Eye

They're expanding the Florida store to 53k square feet and adding a bunch of new amenities in the process. http://www.ncflindependent.com/2015/09/ ... expansion/

[marshd1000]

Since we're speaking of Kroger and Harris-Teeter, I was looking at their online ad. I noticed that for the most part, the private labels have remained separate. There is ONE exception, and that is the fact that they carry some of the Turkey Hill line of products. I know that Kroger owns Turkey Hill Dairy out of Lancaster, PA and also the mini marts of the same name. But I also know some non-Kroger outlets carry their products. So I don't know if Harris-Teeter had done so previously or not. But the ad showed Turkey Hill Iced Tea and Ice Cream on sale. Here in the Northwest, I have seen Turkey Hill Iced Tea at QFC. So that is the one private label brand they have in common with the rest of Kroger. But I am guessing that is it. But I am wondering, if the labels are being changed to look like the Kroger labels but with the Harris-Teeter logo instead? I know that Kroger has done that with Fred Meyer and QFC. But interestingly enough, while there are a lot of Fred Meyer branded products that remain, there are less QFC branded products.

[BillyGr]

There is ONE exception, and that is the fact that they carry some of the Turkey Hill line of products. I know that Kroger owns Turkey Hill Dairy out of Lancaster, PA and also the mini marts of the same name. But I also know some non-Kroger outlets carry their products. So I don't know if Harris-Teeter had done so previously or not. But the ad showed Turkey Hill Iced Tea and Ice Cream on sale. Here in the Northwest, I have seen Turkey Hill Iced Tea at QFC. So that is the one private label brand they have in common with the rest of Kroger.

Is that even considered a "private brand" of Kroger (aside from their ownership of the company)? As you said other places carry it, and (for example) here in NY that makes sense as Kroger doesn't have stores.
But I glanced at their site and in Columbus Ohio, it lists both Kroger and Giant Eagle as carrying it - so it looks like they don't limit it to their own stores even where they do have them.

[pseudo3d]

There is ONE exception, and that is the fact that they carry some of the Turkey Hill line of products. I know that Kroger owns Turkey Hill Dairy out of Lancaster, PA and also the mini marts of the same name. But I also know some non-Kroger outlets carry their products. So I don't know if Harris-Teeter had done so previously or not. But the ad showed Turkey Hill Iced Tea and Ice Cream on sale. Here in the Northwest, I have seen Turkey Hill Iced Tea at QFC. So that is the one private label brand they have in common with the rest of Kroger.

Is that even considered a "private brand" of Kroger (aside from their ownership of the company)? As you said other places carry it, and (for example) here in NY that makes sense as Kroger doesn't have stores.
But I glanced at their site and in Columbus Ohio, it lists both Kroger and Giant Eagle as carrying it - so it looks like they don't limit it to their own stores even where they do have them.

Reminds me of Praters, a brand United (Albertsons) owns. The website got taken down (it's now just a splash page with a link to the United careers page, but the brand was found nationally in Kroger, H-E-B, Costco, Winn-Dixie, and several others.