Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale prices

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storewanderer
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Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale prices

Post by storewanderer »

http://www.spokanejournal.com/local-new ... da-stores/

This is only 4 stores, but still...

WOW. I am usually very positive on what Kroger does. But this looks like a huge loser of an idea to me. Eliminate the dedicated electronics department- fine, that is kind of low margin anyway. Cut out some of the non food and add more space to grocery, okay, I get that too, some of the Fred Meyers do have pretty tight space for food... but the real loser I see in this is they say they will start to require the "Rewards Card" for sale prices and continue the "fuel points" program but eliminate the "Rewards" aspect of it (basically it was spend $500 in a quarter, get a $5 off coupon).

So let's sum this up:
1. Cut mix in the stores. Make it so customers will no longer be sure they will actually find it at Fred Meyer.
2. Cut out Rewards aspect from card. Take something away you were previously offering customers.
3. Start to require Rewards Card for sale pricing. Add a hassle that was not previously implemented. This goes against the long standing formula of Fred Meyer to offer easy, "automatic price reductions."

Oh well, at least it only took them 18 years of owning the chain to do this and if it flops in this 4-location market it won't be rolled out elsewhere, I suspect.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by pseudo3d »

Sounds like what Kroger would like to do is having found some success with the Kroger Marketplace model, decided that it's the best case for all the stores to that more limited mix. Announcing it was probably a bad idea now, because if customer backlash is strong now, then they'll have to back out and admit they made a mistake, or keep going and watch as WinCo and Albertsons/Safeway start eating their lunch. If that was their plan, they should've quietly taken out that sort of thing in store resets and remodels. The card thing is the worse, and it boggles my mind on how they can do that while Albertsons is pushing its rewards program and phasing out required card usage.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by Super S »

Limiting product mix and requiring a card for sale items is going to frustrate people. Fred Meyer has been VERY successful in recent years partly due to the fact they have not required the card and because they have been competitive in the process. Kroger needs to be careful. What works at a Kroger Marketplace which replaced a regular Kroger somewhere in Ohio may not work out here.

I do not shop at Safeway due to the card and other gimmicks. If Fred Meyer starts requiring the card, Walmart and WinCo will be getting my business and Fred Meyer will be out.

Fred Meyer does seem more responsive to complaints than other chains. Hopefully enough will complain about the card.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by bm10k »

In addition to Safeway/Albertsons in Spokane you
also have Rosauers and Yoke's which also don't have gimmicks with store cards

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by Super S »

bm10k wrote:In addition to Safeway/Albertsons in Spokane you
also have Rosauers and Yoke's which also don't have gimmicks with store cards
And don't forget Walmart which has the most similar format.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by pseudo3d »

This seems to be a continuation of the recent "loose cannon"-ization of Kroger. Not to the extent of Albertsons, which has been buying and closing stores since the late 1990s. But Kroger has been doing some unusual things lately. Buying Harris Teeter and not doing much with it, a partnership with Lucky's Market, buying Mariano's and doing something with it, and now this. I wonder if Kroger would actually do anything like leasing excess space or tearing down and rebuilding stores with reduced footprints.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by arizonaguy »

storewanderer wrote:http://www.spokanejournal.com/local-new ... da-stores/

This is only 4 stores, but still...

WOW. I am usually very positive on what Kroger does. But this looks like a huge loser of an idea to me. Eliminate the dedicated electronics department- fine, that is kind of low margin anyway. Cut out some of the non food and add more space to grocery, okay, I get that too, some of the Fred Meyers do have pretty tight space for food... but the real loser I see in this is they say they will start to require the "Rewards Card" for sale prices and continue the "fuel points" program but eliminate the "Rewards" aspect of it (basically it was spend $500 in a quarter, get a $5 off coupon).

So let's sum this up:
1. Cut mix in the stores. Make it so customers will no longer be sure they will actually find it at Fred Meyer.
2. Cut out Rewards aspect from card. Take something away you were previously offering customers.
3. Start to require Rewards Card for sale pricing. Add a hassle that was not previously implemented. This goes against the long standing formula of Fred Meyer to offer easy, "automatic price reductions."

Oh well, at least it only took them 18 years of owning the chain to do this and if it flops in this 4-location market it won't be rolled out elsewhere, I suspect.
It appears that they're converting these stores to their standard "Marketplace" format.

The description in the article (as well as the photos) look exactly like the new Kroger Marketplaces that I have visited in Cincinnati, Savannah, and here in Phoenix.

It's certainly a step up from their traditional Food and Drug store but this does appear to be a step down from a typical Fred Meyer.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by arizonaguy »

pseudo3d wrote:This seems to be a continuation of the recent "loose cannon"-ization of Kroger. Not to the extent of Albertsons, which has been buying and closing stores since the late 1990s. But Kroger has been doing some unusual things lately. Buying Harris Teeter and not doing much with it, a partnership with Lucky's Market, buying Mariano's and doing something with it, and now this. I wonder if Kroger would actually do anything like leasing excess space or tearing down and rebuilding stores with reduced footprints.
Kroger has leased some excess space in the Phoenix area. They've torn down and rebuilt several stores with expanded footprints. They don't seem to want to do the reverse though.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by pseudo3d »

arizonaguy wrote:
pseudo3d wrote:This seems to be a continuation of the recent "loose cannon"-ization of Kroger. Not to the extent of Albertsons, which has been buying and closing stores since the late 1990s. But Kroger has been doing some unusual things lately. Buying Harris Teeter and not doing much with it, a partnership with Lucky's Market, buying Mariano's and doing something with it, and now this. I wonder if Kroger would actually do anything like leasing excess space or tearing down and rebuilding stores with reduced footprints.
Kroger has leased some excess space in the Phoenix area. They've torn down and rebuilt several stores with expanded footprints. They don't seem to want to do the reverse though.
They wouldn't do that in Arizona because there are no aging excessively sized stores that could be replaced.

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Re: Fred Meyer "Spokane Test" - eliminate dedicated electronics, reduce GM, expand liquor/food, require card for sale pr

Post by storewanderer »

What has Kroger changed at Mariano's? All they've done is swap out some existing private label items with Simple Truth, Big K, and Private Selection.

Harris Teeter is not being changed much for some unknown reason. But there are changes. Some of the private label items are being made at Kroger plants despite keeping the old format labels. The stores look completely different and systems integration seems to be happening at a snail's pace.

Kroger in the early 2000's did tear down an old old Fred Meyer in Montana and replace it with a smaller footprint conventional Smiths. Typically they go bigger, not smaller...

Spokane has various card free competitors: Yokes, WinCo, Wal Mart, Albertsons, Rosauers. Interesting market to do this "test" in. Recall Spokane also had the only Fred Meyer store closure in about the past 15 years. Maybe it isn't a great market for them so they figured they did not have much to lose.

Well, Albertsons isn't really card free in a lot of markets. At this point they are requiring Just for You to get various front page specials in TX, CO, ID, UT, etc. some weeks so they may not have a physical card but they are basically requiring the card. Actually what Albertsons is doing is worse than issuing a physical card because the casual shopper can't enter the store and sign up for a card to get the discounts. They must get on a smartphone, download an app, sign up...

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