What exactly happened with Kroger?

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klkla
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Re: What exactly happened with Kroger?

Post by klkla »

In regards to the topic "What exactly happened with Kroger?" IMO it all started December 31st, 2014. That's the date David Dillon retired as Chairman of Kroger. The company has been directionless since.
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Re: What exactly happened with Kroger?

Post by storewanderer »

klkla wrote: March 3rd, 2020, 6:55 pm In regards to the topic "What exactly happened with Kroger?" IMO it all started December 31st, 2014. That's the date David Dillon retired as Chairman of Kroger. The company has been directionless since.
I think it held up okay at first after Dillon left. Since Dillon had built up such a strong and well run operation, it took some pretty serious missteps to get where things have gotten today. But, the past two years... oh boy. I cannot even believe how they have screwed up the operation of the stores with labor cuts, too many self checkouts and not enough cashiers, lousy in-stock conditions, dirty looking stores (filthy stained cement floors- the fresh departments still seem very clean though, at least at Smiths), mostly no employee uniforms- it is clear costs are being cut wherever they can be and it is impacting the customer experience and to me a lot of what they are doing comes off as very downscale. We have seen this type of thing all before. It never ends well. Safeway in the 00's pre-Lifestyle with the very strict shrink programs that were causing entirely empty fresh departments by early evening in busy stores. Albertsons in the 00's with dimming the lights.

But so far in my area Kroger holds onto customers very well. Despite higher pricing on many items than Safeway, every time I go shop at Safeway out in Sparks then go down to the Smiths a few blocks away, the customer count at Smiths is always at least 5x that of Safeway. Despite stronger ads, increased staffing, $10 off $50 coupons, 2x fuel points promotions, and other efforts, Safeway continues to seriously underperform. On Sunday afternoon I went to Safeway and it was moderately busy (3 checkouts open with steady traffic and self checkouts were steady, but no lines anywhere). I was going to go to Smiths to look around, despite already doing most shopping at Safeway since the pricing is lower now, but the store was so congested and crowded with hundreds of cars in the lot I decided to just bypass it entirely.
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Re: What exactly happened with Kroger?

Post by pseudo3d »

Fresh Eats Market got the plug pulled on them. The article also mentions the newish College Station convenience store also got sold off, which is surprising as the last time I remember it (surely sometime in the last year), it still had all the Kroger branded goods (including chilled bottled water at MUCH cheaper than what other c-stores sell it at), it still had the card rewards program, and as far as I know it's still branded as a Kroger gas station. Maybe those are already gone, I'll have to check it out sometime.
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Re: What exactly happened with Kroger?

Post by storewanderer »

pseudo3d wrote: March 4th, 2020, 11:58 am Fresh Eats Market got the plug pulled on them. The article also mentions the newish College Station convenience store also got sold off, which is surprising as the last time I remember it (surely sometime in the last year), it still had all the Kroger branded goods (including chilled bottled water at MUCH cheaper than what other c-stores sell it at), it still had the card rewards program, and as far as I know it's still branded as a Kroger gas station. Maybe those are already gone, I'll have to check it out sometime.
There are some inaccuracies in that article. I expect the College Station c-store is still there. There are at least six or seven Smiths Express c-stores too either near or in the parking lot of existing Kroger stores. Frys has some walk in c-stores as well from when they bought out gas stations that were near their stores vs. building their own fuel center. Same situation in King Soopers division, and some in OH as well where Kroger kept c-stores that were in close proximity to grocery stores that had no fuel center and re-branded them to the local banner. Basically they are a fuel kiosk but they have a full store/interior with more items (and as you point out the same prices as the regular store has, since they use the same cash register as the regular store uses).
omnisuperstore
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Re: What exactly happened with Kroger?

Post by omnisuperstore »

I just posted in the Midwest forum with Marianos.

Their new Kroger aprons and uniforms are awful compared to the classy attire Bob Mariano had them wear.

This is a negative change for sure.

Also notice much longer lines and less cashiers.
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Re: What exactly happened with Kroger?

Post by 1111072036 »

klkla wrote: March 3rd, 2020, 6:55 pm In regards to the topic "What exactly happened with Kroger?" IMO it all started December 31st, 2014. That's the date David Dillon retired as Chairman of Kroger. The company has been directionless since.
Came here to say Rodney McMullen, but you took the words out of my mouth.
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Re: What exactly happened with Kroger?

Post by 1111072036 »

storewanderer wrote: March 4th, 2020, 10:34 pm
pseudo3d wrote: March 4th, 2020, 11:58 am Fresh Eats Market got the plug pulled on them. The article also mentions the newish College Station convenience store also got sold off, which is surprising as the last time I remember it (surely sometime in the last year), it still had all the Kroger branded goods (including chilled bottled water at MUCH cheaper than what other c-stores sell it at), it still had the card rewards program, and as far as I know it's still branded as a Kroger gas station. Maybe those are already gone, I'll have to check it out sometime.
There are some inaccuracies in that article. I expect the College Station c-store is still there. There are at least six or seven Smiths Express c-stores too either near or in the parking lot of existing Kroger stores. Frys has some walk in c-stores as well from when they bought out gas stations that were near their stores vs. building their own fuel center. Same situation in King Soopers division, and some in OH as well where Kroger kept c-stores that were in close proximity to grocery stores that had no fuel center and re-branded them to the local banner. Basically they are a fuel kiosk but they have a full store/interior with more items (and as you point out the same prices as the regular store has, since they use the same cash register as the regular store uses).
Believe it or not, Even some of the Harris Teeters have fuel centers with convenience stores. Most of them were existing gas stations that were bought and rebranded to Harris Teeter, but one location in Northwest Charlotte actually has a Harris Teeter fuel center and convenience store that was built from the ground up in the past year.
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Re: What exactly happened with Kroger?

Post by Bagels »

pseudo3d wrote: March 3rd, 2020, 8:24 am Historically, I don't think Albertsons has ever been much of a threat to Kroger, even in the pre-ASC days ("my" hometown Kroger closed several years ago but was one of the highest-performing Kroger stores in the entire chain at one time and continued to do well, though not packed, up until a new Signature store opened a few miles away; meanwhile, the area Albertsons stores seemed to be always empty). But I think that the "the grocery store is dying" articles are composed of more hype than reality, especially as strong privately-owned chains push on with larger stores and meet with success.

Arguably, you can say that the "traditional" grocery store is dead, the variety of ~30k square feet stores wiped away with new construction, industry consolidations, and Walmart. But there's lots of places Kroger can go without undermining its core business, which it seems to have pulling back from after major layoffs last year...continuing to expand its store base and markets, either through new stores or buying out competitors...going further into GM, including expanding their online selection to ship general merchandise across the country...going beyond retail to diversify into other pursuits...strategic buyout of e-commerce sites as a side option while continuing the grocery business...
The traditional grocery is dying. The number of traditional grocery stores continues to decline each year, and it'll get worse in the coming decade -- Albertson Companies, Southern Grocers, etc. operate hundreds of stores that have very little volume and likely won't make it through the next recession (and we're almost there). Meanwhile, the number of discount stores, specialty markets, bulk warehouses, etc. continues to grow. And online grocery shopping is still in its infancy.

Where can Kroger pick up new consumers? People under 30 aren't interested in shopping at traditional supermarkets. Kroger will have to reinvent itself to stay relevant. In the interim, they'll probably made an acquisition - like Cub Foods - that they can improve upon for results.
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Re: What exactly happened with Kroger?

Post by Bagels »

I find it ironic that Kroger claims they'd like to increase the amount of local products and flavors sold in each division... and now it appears they've replaced many local breads throughout the country with La Brea Bakery products!
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Re: What exactly happened with Kroger?

Post by storewanderer »

I hate to say it, but given the current situation, it appears all of the money Kroger is spending on the robotic fulfillment and online ordering centers may actually end well.

This virus situation has pushed tons of customers to using online services and those services cannot keep up with demand. Adding additional capacity will likely be easily absorbed by demand as demand for these services will probably stick even after this whole virus thing is over. I talk to a lot of people who say they will not go back to shopping in-store again unless it is for a few quick items. What is funny is people don't even mind all of the item substitutions or unavailable items with the order fulfillment, they just accept it as the situation right now and do not hold it against the online ordering service or curbside pick up service, which is pretty interesting.

Add to that the issue of virus outbreaks in distribution centers due to employees working too close. If the center has a lot of robotic stuff happening, that significantly reduces the number of employees needed and should alleviate a lot of the "employees working close together" thing.
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