Thursday, April 20, 2006

Kroger Aims for New Store Categories

Chain Store Age

CINCINNATI - Kroger is undergoing a redesigning and remerchandising effort in order to fit its stores into "upscale," "value" and "mainstream" categories, Supermarket News reported.

The move comes as the company is renovating its portfolio and adds new locations. The new store categories will reportedly emphasize different kinds of products and services.


  1. I suppose this is so they can compete with Heinen's?? Let's hope their prices stay below those of Heinen's or they'll surely lost customers!

  2. OK...I need to elaborate on that last comment. This would only be the case if they choose to penetrate the Cleveland area, where Heinen's is in every upscale neighborhood. It would be about damn time we got a Kroger around here...for some reason they are everywhere BUT Cleveland.

    Guess I'll have to do some research...

  3. Kroger had been going with a "one size fits all" store design for many years, and I guess it doesn't work as well as it used to.

    I had to look up Heinen’s because I had never heard of them before your post. Looks like a classy operation. I've seen some Krogers that are like that, but it looks more upscale, kind of like The Fresh Market is here.

    If Heinen’s is much like The Fresh Market, Kroger would kick their ass on price, but wouldn't do as well on perishable quality.

    I also looked up if Kroger ever was in Cleveland. Apparently it was there as late as the '80s, but they sold out of the market for some reason. Probably something union related, which is why Kroger left a lot of markets.

    There was/is a rumor going around that Kroger may buy out Tops Markets. That could be interesting.

    My friend Toby would know loads more about it...

  4. This approach makes sense for Kroger. It seems that the company is following the example of its Ralphs division, which it acquired as part of Fred Meyer in 1999.

    In Southern California, Ralphs operates three formats:
    1) Food 4 Less, the "value" category, which operates "no frills" warehouse-style stores;
    2) Ralphs Fresh Fare, the "upscale" category, which operates higher-end stores akin to The Fresh Market or Whole Foods; and
    3) Ralphs, the "mainstream," one-size-fits-all supermarket brand.

    Ralphs' "three store" approach seems to be working well here, allowing it to retain its #1 market share in L.A.

  5. I think Kroger would do well to diversify. Food Lion is trying a similar strategy with Bottom Dollar, Food Lion and Bloom. But with the infrastructure and West Coast experience, Kroger will do a better job at it.