What exactly happened with Kroger?

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storewanderer
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Re: What exactly happened with Kroger?

Post by storewanderer »

rwsandiego wrote: September 20th, 2020, 8:06 pm
The free-standing Ralphs was a dive from the time I moved to San Diego until they tore it down. The replacement Ralphs was built with the then-current decor package (which is quite nice, IMO) but I never liked that store, either. Could never put my finger on why, though.
The free-standing Ralphs was one of those old "24 hour Superstore" model stores which was probably modern in the late 80's. I was in that store multiple times for some reason over the years in San Diego from the early 90's on. The last time I was in it, shortly before it was replaced, it had the late 90's/early 00's interior (green wall signs/white backgrounds) and flooring was coming up, lighting seemed dirty/dingy, and it was just in awful shape yet had a full perimeter so I got the impression it was doing pretty good volume. I actually didn't know the store was being replaced at that time, as I was there at night and could not see any construction; based on the condition of the store I was expecting it to close.

The problem with the replacement store is the layout is a little strange for the shape of the building. The aisles seem too long and kind of narrow. There are no good lines of sight to anywhere in the store once you move away from produce/bakery/deli (and it could be argued line of sight over there isn't great either). The store is too deep. As I recall there was only one way in and one way out. That store is a pretty similar floorplan to the two Reno Smiths which I think are similar in size (one is 57k sq ft and the other is about 65k sq ft) but the two Reno Smiths are not so deep and the layout works in those, and I've seen that layout in many larger Kroger Stores where it also works fine.
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Re: What exactly happened with Kroger?

Post by klkla »

Kroger announced their 2020 ear end results today.

"The Kroger Co. bolstered its market share in fiscal 2020 with double-digit identical-sales gains and triple-digit e-commerce sales growth in the fourth quarter and full year, besting Wall Street’s earnings estimates for both periods. For the quarter ended Jan. 30, sales came in at $30.73 billion, up 6.4% from $28.89 billion a year earlier, Kroger said Thursday. Excluding fuel and dispositions, sales rose 10.7%. Identical sales climbed 10.6% in the quarter, backing out fuel and adjustment items, the Cincinnati-based supermarket giant reported."

"“2020 was the final year of our three-year transformational plan, Restock Kroger, during which we made strategic investments and changes to our business model to better serve our customers. We focused on widening and deepening our competitive moats, which includes Seamless, Personalization, Fresh and Our Brands. As a result, we generated strong momentum and successfully repositioned our company to serve our customers in new and exciting ways,” Kroger Chairman and CEO Rodney McMullen told analysts in a conference call on Thursday."

"Kroger also reached a milestone in its omnichannel strategy: the first online order processed through an Ocado-powered customer fulfillment center (CFC). The first of the automated CFCs, a 335,000-square-foot facility in Monroe, Ohio, is slated to become operational in early 2021. So far, Kroger has announced locations for 10 CFCs as part of the partnership unveiled with United Kingdom-based Ocado in May 2018, which calls for 20 of the facilities to be opened in the United States. Yesterday, we completed the inaugural order through our first Ocado ‘shed’ in Ohio. This marks the soft opening of the facility, and we look forward to our grand opening in early April,” McMullen said in the call. "

https://www.supermarketnews.com/retail- ... ullen-says
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Re: What exactly happened with Kroger?

Post by storewanderer »

We will see how they do this year.

Also curious how much of that sales increase came from price increases. Their pricing has gotten screwed up. Still some good everyday retails, but fewer and fewer of them. And the stuff that isn't a good everyday retail, is priced outrageously high (like Safeway/Albertsons at their worst). Previously even the stuff they didn't have marked EDLP was at least within reason like 10-20% above Wal Mart (not 40%-50% above Wal Mart). Also that you have to go through many many hoops via their digital app to get what used to be their standard sale prices, I suspect for the (many) customers who don't bother with that and just pay whatever the store card price is, has also helped get their numbers up.

Remember Safeway was able to keep posting good numbers for quite a few years before things really unraveled there and Burd retired. And they followed the same path Kroger seems to be following: increase prices, cut service levels in the stores, build few new stores at a time competitors keep building them... I do hope Kroger gets things back together. Dave Dillon out of retirement and shifting folks back into the division management roles who understand the quirks and unique qualities of the individual divisions is urgently needed. Smiths is still being run by a veteran Smiths person and it looks a lot better than these divisions like Ralphs, Fred Meyer, etc. that are being run by folks who simply do not have a long enough history with the banners to understand the unique qualities of the formats.
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Re: What exactly happened with Kroger?

Post by pseudo3d »

storewanderer wrote: March 4th, 2021, 8:05 pm We will see how they do this year.

Also curious how much of that sales increase came from price increases. Their pricing has gotten screwed up. Still some good everyday retails, but fewer and fewer of them. And the stuff that isn't a good everyday retail, is priced outrageously high (like Safeway/Albertsons at their worst). Previously even the stuff they didn't have marked EDLP was at least within reason like 10-20% above Wal Mart (not 40%-50% above Wal Mart). Also that you have to go through many many hoops via their digital app to get what used to be their standard sale prices, I suspect for the (many) customers who don't bother with that and just pay whatever the store card price is, has also helped get their numbers up.

Remember Safeway was able to keep posting good numbers for quite a few years before things really unraveled there and Burd retired. And they followed the same path Kroger seems to be following: increase prices, cut service levels in the stores, build few new stores at a time competitors keep building them... I do hope Kroger gets things back together. Dave Dillon out of retirement and shifting folks back into the division management roles who understand the quirks and unique qualities of the individual divisions is urgently needed. Smiths is still being run by a veteran Smiths person and it looks a lot better than these divisions like Ralphs, Fred Meyer, etc. that are being run by folks who simply do not have a long enough history with the banners to understand the unique qualities of the formats.
I can't see Kroger going down the same route as Safeway just on the basis that Kroger's acquisitions have worked out well for them, all the grocery chains Burd acquired (maybe except for Vons and the Tom Thumb side of Randalls) were all run straight into the ground. How a chain does often reflects any future prospects, Kroger has done very well for years, while Safeway had those problem chains for a decade and a half before they threw in the towel.

Unless Kroger is covering for something nasty (in the last year or so there have been only whiffs of that but in the end, there's no proof one way or another) they won't be doing any market pullouts as Albertsons and Safeway have done in the past, at least no BIG ones.
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Re: What exactly happened with Kroger?

Post by storewanderer »

Was in and out of quite a few Fred Meyer Stores around Portland this week (but none in Portland proper). The stores look great. They are neat, well stocked, clean, well staffed, employees are pleasant and friendly, and clearly seem to be executing surprisingly well. Lots and lots of online pickup orders are being fulfilled in these stores too. The food side of Fred Meyer seems to continue to be hitting well on all cylinders. The non food side of the stores seems to be rather lost but what was interesting in these locations is there were people shopping those departments. Signs all over that they price match- the problem is they have a lot of weird obscure brands now. It seems like they have fewer name brands than before not just in clothing but throughout non food. Also the Everyday Living private label is almost gone which is odd. They probably need to develop better private label lines for their non food areas. Dip has clearly not worked. Funny to see Martha Stewart home items there too. Really well displayed in one of their recent remodels too (Beaverton). Also the garden centers are just being set up for the spring and these areas look fantastic. Healthy hearty looking plants with great depth of accessories.

There were some odd things in Fred Meyer. The service bakery cases seemed to be gone from most locations; all cakes, cake slices, etc. are thaw and sell items (standard Kroger stuff) whereas Fred Meyer previously had some better stuff. Unfortunate that went away but given Kroger's awful bakery programs elsewhere it was just a matter of time before they screwed up the Fred Meyer one I guess. Also was surprised most stores pulled out the hot food steamtables and switched to that Chicken Co. thing with a little popcorn-machine sized display of food on the counter. Did not see anyone buying any hot food from those Chicken Co. counters either. It did appear the most recent remodel I saw (Beaverton) had a full size hot fixture (Bistro- guess they are back to that program again) not this Chicken Co. thing.

Also those phantom security pages over the speakers every 30 minutes- with a couple different voices/zone variations- one even talks over the piped in music while one talks in between songs- have got to go. After I went into a couple stores I heard the same voice paging for zone A, zone C, etc. Do they really think the shoplifters are this stupid to be deterred by these pages?

Also went into a QFC in Vancouver, WA. I've been in this store before and it never seemed very busy. This time was no different. A weeknight around 6 PM and they had one checkout and the 4 self checkouts open and that was adequate for the number of customers shopping. Seafood was being closed for the night, bakery was closing (had cleared out the single donut case; had markdown of 4ct croissants for $5.79 from the case with an original price of over $10...), deli wasn't staffed but appeared to be open, and the place hardly had any customers. This store is nice looking but clearly does not hit the mark. The coffee aisle has great variety (but so does the one at Fred Meyer, for far lower prices). The bakery, deli, and produce areas have fewer options and what look like lower quality items than Fred Meyer with higher prices (not sure how this works when they are on the same distribution). I suspect the issue with produce is lack of product turnover (since the prices are so high...). Not sure why but this store was still out of rubbing alcohol something every other store figured out how to keep in stock months ago (Fred Meyer seems to have it...). Bakery/deli was the same garbage Smiths sells, at about 35% higher prices. Weird generic prepack sandwiches, etc. in some generic brand from who knows where, looked like stuff from a gas station. I don't know what happened to all of the old black and gold label QFC Signature prepack deli sandwich/pizza/etc. items from the old QFC Commissary- that must have been closed but you'd think they would have at least tried to continue that line of products with that upscale packaging.

I don't know what Kroger is doing with this QFC group of stores. I sure hope they are better up in Seattle. I was going to check out a couple other QFCs but decided to just bypass them based on how things went in the first one. Albertsons/Safeway must be absolutely killing this QFC chain where they go head to head with better assortment, better staffing, larger perimeter options, and lower pricing. It is almost like Kroger is trying to kill QFC.
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Re: What exactly happened with Kroger?

Post by SamSpade »

More good news for the top at Kroger:
https://twitter.com/DanPriceSeattle/sta ... 6786364425
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Re: What exactly happened with Kroger?

Post by veteran+ »

SamSpade wrote: July 20th, 2021, 11:14 pm More good news for the top at Kroger:
https://twitter.com/DanPriceSeattle/sta ... 6786364425
:lol: :lol: :lol: :lol:

No surprise!
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Re: What exactly happened with Kroger?

Post by pseudo3d »

SamSpade wrote: July 20th, 2021, 11:14 pm More good news for the top at Kroger:
https://twitter.com/DanPriceSeattle/sta ... 6786364425
Wonder why they're still hung up on the pay increases in California as opposed to stores closing left and right without replacement across nearly every division.

Moreso, what will become of this? Is this going to be another instance of beating the "greedy CEOs" drum or an early warning sign that he's taking the golden parachute out of the company?
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Re: What exactly happened with Kroger?

Post by arizonaguy »

pseudo3d wrote: July 21st, 2021, 11:48 am
SamSpade wrote: July 20th, 2021, 11:14 pm More good news for the top at Kroger:
https://twitter.com/DanPriceSeattle/sta ... 6786364425
Wonder why they're still hung up on the pay increases in California as opposed to stores closing left and right without replacement across nearly every division.

Moreso, what will become of this? Is this going to be another instance of beating the "greedy CEOs" drum or an early warning sign that he's taking the golden parachute out of the company?
Walmart has also been closing stores left and right without replacement nationwide.

It's simply the byproduct of both companies shift to digital. I'd imagine over the next 10 - 15 years we'll easily see Kroger close 500 stores and Walmart close 1500 stores if digital takes off like projected and/or Amazon begins to really chew up market share.
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Re: What exactly happened with Kroger?

Post by BatteryMill »

arizonaguy wrote: July 21st, 2021, 2:07 pm
Walmart has also been closing stores left and right without replacement nationwide.

It's simply the byproduct of both companies shift to digital. I'd imagine over the next 10 - 15 years we'll easily see Kroger close 500 stores and Walmart close 1500 stores if digital takes off like projected and/or Amazon begins to really chew up market share.
No way. I really would not want it to get to this, where the streets are filled with vacant big-box buildings and the grocery trip becomes a flat experience on one's smartphone. Of course other things are going on where these stores are weak, but hopefully this is not going to be entirely true.
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