Grocery Industry Embraces Change!

In our continuing series on change and its rapid spread across most every industry in the country, we will share examples which have been very successful, those which have failed and those which have yet to prove to be wise or foolish. There are certainly lessons to be learned in every instance.

Let’s see what the news holds for us this week:

We see a number of our clients asking and answering the following question:

What new products and/or services might we offer in the near future to insure our growth and success?”

Apparently many others are asking that same question and coming up with some interesting answers.

Kroger Tests New Markets

When you hear the name “Kroger,” you normally think of groceries.That might be because Kroger has been providing a wide variety of food products to its customers for 128 years. Headquartered in Cincinnati, Ohio, Kroger reported sales of $90.4 last year, making them the largest grocery chain in the U.S. and fourth largest in the world. It currently operates 3,574 stores under nearly 24 different banners.

Kroger’s store formats include supermarkets, price-impact warehouse stores, hypermarkets, department stores, convenience stores and mall jewelry stores.

Food stores are its primary business and account for approximately 94% of total company sales. Kroger is the parent company to several “banner” supermarket chains in 31 states, such as: Ralph’s, Dillons, King Soopers, City Market, Pay Less Super Markets, Smith’s, Fry’s, QFC (Quality Food Centers), Baker’s, Owen’s, JayC Food Stores, Gerbes, Scott’s Food & Pharmacy, and Kroger Fresh Fare.

Kroger also operates 788 convenience stores under six banners in 19 states: Turkey Huill, Kwik Shop, Loaf ‘N Jug, QuikStop, Tom Thumb, and Smith’s Express.

It also operates 342 fine jewelry stores under names such as like Fred Meyer Jewelers, Littman Jewelers, Barclay Jewelers, and Fox’s Jewelers.

Its price-impact warehouse stores operate under the banners of Food4Less and FoodsCo.

Its multi-department stores are known as Fred Meyer.

Its marketplace stores operate under the following banners: Fry’s Marketplace, Smith’s Marketplace, Dillon’s Marketplace, and Kroger Marketplace. These locations are larger than its typical grocery stores and sell car parts and furniture in addition to groceries.

Kroger also operates 37 food-processing or manufacturing facilities, producing high-quality private-label products that provide enhanced margins for Kroger.

Kroger operates 1,124 supermarket fuel centers, which are a natural addition to its one-stop-shopping strategy.

Kroger’s 1,948 pharmacies, located in its combination food and drug stores, provide high-quality services at everyday low prices.

Kroger Personal Finance, LLC provides personal finance products and services. It offers credit, prepaid debit, gift, and reloadable debit cards; pet insurance for dogs and cats; ID theft and fraud protection, and credit monitoring services; and in-store money services, such as check cashing, coin counting, and money transfer services.

The Little Clinic provides high-quality, affordable healthcare located in convenient retail settings. The Little Clinic diagnoses and treats minor illnesses for patients 18 months of age and up with care provided by board certified nurse practitioners and/or physician assistants. The Little Clinic operates 80 clinics in select Kroger, Fry’s, and King Soopers stores in Ohio, Kentucky, Tennessee, Arizona, Georgia and Colorado.

In select locations, it also has “cheese masters,” or associates who wear red jackets and offer customers expertise on cheese selections.

Kroger Tests a New Change

You may very soon see a major change in your local Kroger stores as it has decided to test clothing (shoes, jewelry and undergarments, including brands such as Skechers, Hanes and Levi’s). It’s a one-store test being conducted in Ohio. Decisions to expand will be based on customer feedback. The test comes as traditional supermarkets struggle to compete with big-box retailers such as Target Corp. and Wal-Mart Stores Inc.

To hang onto customers, Kroger has been working to improve the shopping experience and differentiate itself from the pack. For example, the company has cut down on checkout wait times and offers a loyalty program that offers customers discounts base on their past purchases.

If this major change proves to be successful in this location, you can expect many of the additional 3,574 stores to follow suit. That’s a major change. As you look over the diverse products and services listed above that are currently offered by Kroger, you must wonder what will next appear in your traditional grocery store. Kroger certainly has a wide variety of choices to choose from.

Here’s another thought. Don’t you think Kroger’s nationwide competitors are interested in this special project? They’ll be watching closely to see if it’s successful. Can you imagine these major changes taking place across the country in such major chains as Safeway, Supervalu, Publix Super markets, Piggly Wiggly Stores, A & P, Whole Foods, Winn-Dixie, ShopRite, Wegman’s, and others.

This could be a major revolution in a traditional industry that has for years offered little or no innovation. Change originating in one single store could impact an entire industry from coast to coast.

You might want to chat with your own staff about the possibility of adding additional products and services that may add value and insure success in the future.

About Harry K. Jones

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of professional speakers who provide custom-designed seminars, keynote presentations, and consulting services. Harry's top requested topics include change management, customer service, creativity, employee retention, goal setting, leadership, stress management, teamwork, and time management. For more information on Harry's presentations, please call 800-886-2629 or fill out our contact form.

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