The Kroger Company is America's biggest traditional supermarket group, but was displaced as the country's leading food retailer overall by Walmart in 2002. In fact the Kroger retail brand accounts for only a small proportion of revenues. Instead the group is the umbrella for a substantial portfolio of almost 2,800 outlets operating under 20 different regional banners, including Fred Meyer, Ralphs, King Soopers, Smith's and Food4Less. The group's most important markets are Los Angeles, Atlanta, Houston, Phoenix and Seattle, but it has a presence in 35 states nationwide as well as DC. The majority of stores operate a so-called combination format, offering "one-stop" supermarket and pharmacy services. Around half of all stores also have adjoining fuel centres. (A separate collection of convenience stores - Tom Thumb, Turkey Hill and others - was sold in 2016). In an attempt to meet Walmart halfway, Kroger has boosted its range of non-food products in what it calls multi-department "Supercenter" stores. After a difficult period in 2003 and 2004 as a result of labour disputes, Kroger appeared to regain its momentum and has demonstrated solid performance since 2006, partly as a result of the launch of a very successful loyalty card program. In 2013 it expanded its national reach with the purchase of regional competitor Harris Teeter for $2.5bn, and has continued to widen its footprint with at least one additional acquisition each year. One of the most notable in recent years was Rondy's including its Chicago flagship Mariano's. The US market remains intensely competitve, but Kroger is weathering the storm with steady annual improvements in market share. The group is one of America's biggest own brands manufacturer: private label accounts for close to a third of its food sales. The main Kroger banner brand generates sales of over $13bn annually, premium Private Selection for over $5bn and organic or free-from brand Simple Truth for more than $2bn. A separate division of Fred Meyer is also America's third-largest fine jewellery retailer, and the group also owns Vitacost, an online retailer of vitamins and other shelf-stable healthcare products. Another new development in 2017 was a push into prepared foods for takeaway service, and even the test-launch of the group's first standalone restaurant, Kitchen 1883, in Union, Kentucky. Group revenues for fiscal 2018 were $121.2bn, with net earnings of $3.1bn. Rodney McMullen is chairman & CEO. The group's inhouse precision marketing division is 84.51 Degrees, originally a JV with Tesco's UK-based Dunnhumby, and Kroger is also the supply partner for the US arm of UK delivery service Ocado.
Capsule checked 25th November 2019
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Historical profile information for Kroger
Adbrands Weekly Update 8th Feb 2018: US supermarket group Kroger has sold its convenience store division to UK-based Euro Garages Group, which currently operates around 3,600 gas stations, forecourt restaurants and convenience stores across Europe. It operates franchises on behalf of multiple brands including Esso, BP, Texaco, Shell, Spar, Carrefour, Delhaize, KFC, Starbucks and Subway. The deal marks EG's debut in the US. Price was $2.15bn. The Kroger estate includes around 800 outlets in 18 states operating under banners including Turkey Hill, Loaf ’N Jug, Kwik Shop, Tom Thumb and Quik Stop. Combined sales were around $4bn last year.
Adbrands Weekly Update 12th October 2017: M&A rumours should often be taken with a pinch of salt, but some are more exciting than others, so it's always worth hearing about them. One such is the report that US supermarket giant Kroger - the #2 in food retail after Walmart - is exploring the possibility of a merger with newly minted Benelux-based group Ahold Delhaize, which now ranks #5 in the US. Presumably, Kroger's main interest in its Ahold's local operations - Stop & Shop, Giant Foods, Food Lion and others - as a counter to further expansion by Walmart and German discounters Aldi and Lidl, as well as the new threat from Amazon's Whole Foods. The heritage business in the Netherlands and Belgium would no doubt be spun off. Kroger and Ahold responded to media inquiries with a no comment rather than a denial. What Kroger has, however, confirmed is that it is also considering a plan to spin off its convenience store division, with annual revenues of around $1.4bn, as part of a general "strategy reset". A sale could raise as much as $4bn which would be reinvested into the larger stores - self-serve checkouts, staff training - to counter the threat from rival chains.
Adbrands Weekly Update 9th Mar 2017: Kroger, still the leading traditional supermarket but #2 in food behind Walmart, reported a generally solid year, but same-store sales excluding fuel fell 0.7% in the final quarter. That was Kroger's first such decline in 13 years, and also the second consecutive quarter it which its same-store comps were behind Walmart. Fierce competition in the sector, especially on pricing, was to blame. Sales were up 5% to $115.3bn; earnings slipped back just below $2bn as a result of pension adjustments.
Adbrands Weekly Update 12th Nov 2015: US groceries giant Kroger expanded its already extensive footprint with a deal to acquire smaller rival Roundy's Supermarkets for $800m. Both groups already control multiple different regional banners. In addition to its own eponymous stores, Kroger operates more than 20 other banners including Ralphs, Dillons, Smith's, King Soopers, Tom Thumb and Fry's. Roundy's will add four more: it is probably best-known for its Mariano's chain in Chicago, but also controls Pick 'n Save and two other chains in Wisconsin.
Adbrands Weekly Update 10th Jul 2014: US supermarket giant Kroger agreed to acquire Vitacost, an online retailer of vitamins and other shelf-stable healthcare products, for $280m. It plans to keep the business separate from its existing bricks and mortar outlets. The group has a very low-key online presence. Despite being the country's biggest traditional supermarket group, and #2 food retailer after Walmart, Kroger currently has virtually no ecommerce business (other than in the city of Denver), though the recently acquired Harris Teeter estate offers online oredering for instore collection.
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