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Kroger headquarters in Cincinnati, Ohio.
The Kroger Co. ( ) is an Americanmarker retail supermarket chain and parent company, founded by Bernard Henry Kroger in 1883 in Cincinnatimarker, Ohiomarker. It reported US$76 billion in sales during fiscal year 2008. It is the country's largest grocery store chain and its second-largest grocery retailer by volume and second-place general retailer in the country, with Wal-Martmarker being the largest . As of the first quarter of 2009, Kroger operated, either directly or through its subsidiaries, 2,475 supermarkets, and had 798 fuel centers.

Kroger's headquarters are centralized in Downtown Cincinnati, but it spans many states with store formats that include supermarkets, hypermarkets, department stores, convenience stores and mall jewelry stores. Kroger-branded grocery stores are located throughout the Midwestern and Southern United States.

History

Kroger was founded by Bernard Henry Kroger in 1883 in Cincinnati, Ohio. Kroger pioneered the first supermarket surrounded on all four sides by parking lots in the 1930s. In 1983, The Kroger Company acquired Dillon Companies grocery chain in Kansas along with its subsidiaries, King Soopers, City Market, Fry's, Baker's, Gerbes, and the convenience store chain Kwik Shop. David Dillon, in the 4th generation under J.S. Dillon, the founder of Dillon Companies, is now the CEO of Kroger.

Chains

  • Baker's (Nebraska)
  • Cala Foods and Bell Markets (California)
  • City Market (Colorado, Wyoming, Utah, New Mexico)
  • Dillons (Kansas, Missouri)
  • Food 4 Less and Foods Co. (Los Angeles, California; San Diego, California; Las Vegas, Nevada; Chicago, Illinois; NW Indiana)
    • including Hispanic format and Food 4 Less Carniceria
  • Fred Meyer (Alaska, Idaho, Oregon, Washington)
    • Fred Meyer Marketplace (Alaska, Oregon, Washington)
    • Fred Meyer Northwest Best (Oregon, Washington)
  • Fred Meyer Jewelers
    • Littman Jewelers
    • Barclay Jewelers
    • Fox's Jewelers
  • Fry's Food and Drug (Arizona)
    • Fry's Marketplace (Arizona)
    • Fry's Mercado (Arizona)
    • Fry's Signatures (Arizona)
  • Gerbes (Missouri)
  • Hilander (Illinois)
  • JayC Food Stores (Indiana)
  • King Soopers (Colorado, Wyoming)
  • Kroger Food and Drug (Ohio, West Virginia, Virginia, Kentucky, Indiana, Illinois, Michigan, Tennessee, North Carolina, South Carolina, Georgia, Mississippi, Texas, Alabama, Arkansas, Louisiana)
    • Kroger Marketplace (Ohio, Kentucky, Tennessee, Texas)
    • Kroger Signature Stores (Texas)
    • Fresh Fare by Kroger (Ohio, Michigan, Georgia)
  • Kwik Shop (Kansas, Nebraska)
  • Loaf 'N Jug (Colorado, Nebraska, North Dakota, Wyoming)
  • Owen's Market (Indiana)
  • Pay Less Food Markets (Indiana)
  • Quality Food Centers (Oregon, Washington)
    • QFC Fresh Fare
  • Quik Stop (California, Nevada)
  • Ralphs (California)
    • Ralphs Marketplace
    • Ralphs Fresh Fare
  • Scott's Food & Pharmacy (Indiana)
  • Smith's Food and Drug (Arizona, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming)
    • Smith's Marketplace (Utah)
  • Turkey Hill (Pennsylvania)


Kroger Marketplace

Kroger Marketplace is a chain of hypermarkets. The brand was introduced in 2004 in the Columbus, Ohiomarker, area, which lost the Big Bear and Big Bear Plus chains in Penn Traffic's Chapter 11 bankruptcy. The Kroger Marketplace format is based on the Fry's Marketplace stores that the Arizona division of Kroger is currently operating.

Similar to rival chains Meijer, Sears Grand, Super Kmart, Wal-Mart Supercenter, and modeled after Kroger-owned Fred Meyer, these stores contain multiple departments. In addition to the grocery department, they contain a Fred Meyer Jewelers, Starbucks, Donato's Pizza, and an in-store bank, as well as sections for toys, appliances, and home furnishings, something that Big Bear once had in their stores in the Columbus area.

In 2005, the company began renovating many Kroger Food & Drug stores in Ohio to give out an expanded and remodeled look, converting them to the Kroger Marketplace format. In February 2006,Kroger announced plans for two new Kroger Marketplace stores to open by the end of the summer in Cincinnati suburbs Lebanon and Liberty Township. The store in Liberty Township opened in July 2006. On October 5, 2006, a new Kroger Marketplace opened in Gahanna. With the Gahanna opening, the number of Kroger Marketplace stores is six, four in the Columbus area and two in the Cincinnati area. Two more stores are planned in 2007, one in Middletown and one in Englewood.

Two more stores have opened in the Cincinnati area, in the Northern Kentucky suburbs of Hebron and Waltonmarker which were completed in November, 2008. Another renovated store has recently opened in Blue Ash, and two more are being opened in the Lexington, KYmarker, area. Another store is being planned, for Beavercreek, Ohiomarker, and is planned to open in the spring of 2010.

The first Kroger Marketplace store in Texas opened October 9, 2009, in the Waterside Marketplace in Richmond, Texasmarker.
 The second Kroger Marketplace store in Texas will be built in Rosenbergmarker and is slated to open in December 2009.


The first Kroger Marketplace store in Tennessee opened in Farragut, TNmarker (a small suburb outside of Knoxvillemarker) at the end of 2008, and a second store in Thompson's Station, TNmarker (about 20 miles south of Nashvillemarker) in early 2009. Currently a third location is underway in Gallatin, TNmarker, and is expected to open late January of 2010.

The first Kroger Marketplace in Virginia is planned to open on Midlothian Turnpike in Richmond, VAmarker, on the site of the former Cloverleaf Mall.

Manufacturing

As well as stocking a variety of regional brand products, The Kroger Co. also employs one of the largest networks of private label manufacturing in the country. Forty-two plants (either wholly owned or used with operating agreements) in seventeen states create about half of Kroger’s nearly eight thousand private label products. Similar to most major supermarket retailers, Kroger uses a three-tiered private label marketing strategy.

Manufacturing Plants

Kroger operates 41 manufacturing plants, and packages and sells items for other retailers under the Inter-American Products Company name.

Dairies

Kroger operates 15 dairies and three ice cream plants

Bakeries/Delis



Meat Plants



Grocery Items

  • America's Beverage Co. - Irving, TX - soft drinks, waters
  • Bluefield Beverage Co. - Bluefield, VAmarker - soft drinks, waters
  • Delight Products Co. - Springfield, TNmarker - dry dog and cat foods
  • Kenlake Foods - Murray, KYmarker - nuts, hot cereal, cornmeal, powdered drinks
  • Pontiac Foods - Columbia, SCmarker - coffee, seasonings, spices, rice, noodles, sauces
  • Springdale Ice Cream & Beverage - Cincinnati, OHmarker - soft drinks, waters, ice cream
  • State Avenue - Cincinnati, OH - salad dressings, red sauces, syrups, broths, jams and jellies
  • Tara Foods - Albany, GAmarker - peanut butter, flavorings, steak sauces, vinegar, cooking wines, lemon juice, soy sauce


Private Brands

Kroger Value

Early in 2007, Kroger introduced its Kroger Value line. The Kroger Value line is the successor to the FMV or For Maximum Value brand previously offered at Kroger stores. The brand change departed from the typical orange-fade-to-yellow labels and is now simply white with blue and red. Since then Kroger has expanded the line to many other items, for example: frozen food, butter, dog and cat food, ice cream, paper towels, bleach, and other food and household items.

For Maximum Value (Kroger Value)

For Maximum Value (FMV), originally named Fred Meyer Value, offered staple products such as sugar, flour, bread, and canned goods at the lowest price for that particular product in the store. Though some FMV products (such as their cheese made with water and partially hydrogenated soybean oil) use a lower-quality manufacturing process, other products appear to be indistinguishable from their banner brand equivalent (FMV sugar and Kroger sugar, for example) other than the price.

In 2007, Kroger replaced FMV with the new Kroger Value brand. This has led to a situation where Kroger brand and Kroger Value brand products are sold side-by-side with little to distinguish them except for packaging and price. FMV itself was the successor to Kroger's former Cost Cutter brand, which had been introduced in 1981 and was known for its near-generic product labeling. Most Kroger Value brand items are labeled bilingually (English and Spanish).

Banner Brands

Banner Brands, goods that bear the name of Kroger or its subsidiaries (i.e., Ralphs, King Soopers, etc.) or make reference to them (i.e., Big K) are offered with a “Try it, Like it, or Get the National Brand Free” guarantee, where if the customer does not believe the Kroger brand product is as good as the national brand, they can exchange the unused portion of the product with their receipt for the equivalent national brand for free. Many of Kroger’s health and beauty goods, one of the company's fastest-growing private label categories, are manufactured by third-party providers; these products include goods like ibuprofen and contact lens solution.

Private Selection

Products marked Private Selection are offered to compare with gourmet brands or regional brands that may be considered more upscale than the standard Kroger brand products.

While the Private Selection name includes many products, two of the most popular Private Selection items are ice cream and deli meat.

Other private label brands

As well as the major grocery brands, Kroger’s manufacturing creates a variety of general merchandise brands. These are featured especially in Fred Meyer stores, where more than half the goods sold are non-food, or in the smaller Fred Meyer-based Marketplace stores. The following brands might be found in various Kroger-owned stores:

Bread
  • SuperKids - IronKids bread competitor


Dairy
  • Springdale - milk by the gallon
  • Mountain Dairy - milk by the gallon (Smith's, Fry's and Ralphs)
  • Sungold - sweet and unsweet gallon jug tea
  • Thirst Rockers - imitation juice (water, high fructose corn syrup, 0% juice)
  • Country Club - butter


Deli
  • Angelino's - pizza with its own bake pan
  • Your Deli Selection - baked beans, coleslaw, potato salad


Drug & General Merchandise
  • HD Designs – upscale home goods
  • MotoTech – automotive supplies
  • Office Works – stationery and office supplies
  • Splash Sport, Splash Spa, and Bath & Body Therapies – bath and body supplies


Frozen Food
  • Country Club - real butter sticks, half-gallon ice cream/frozen yogurt ( Discontinued in Scotts Food and Pharmacy stores )
  • Old Fashioned - gallon tub ice cream/frozen yogurt


Grocery and General Merchandise
  • aromaFUSIONS - air freshener supplies, scented candles
  • Big K - soda, cooler drinks, sparkling water
  • Crystal Clear - flavored sparkling water
  • Disney's Old Yeller - dry dog food
  • Everyday Living – kitchen gadgets & cleaning supplies, furniture
  • On the House - margarita and other drink mixes
  • Pet Pride - dry dog and cat food, cat litter
  • Tempo - laundry detergent and fabric softener


Whole Health (Nutrition)
  • Naturally Preferred – organic and natural foods


Disney Magic Selections

In 2006, Kroger partnered with the consumer products division of The Walt Disney Company to add the Disney Magic Selections line to its private label offerings. In reality, many of these products have been substituted in place of Kroger's Signature brand equivalents on the shelf, often with an increase in price. With packaging featuring animated Disney and Pixar characters, such as Mickey Mouse as Chef Mickey, these products are marketed to help promote healthy eating among children. Most of the approximately one hundred initial products contain zero grams of trans fat and include food offerings such as yogurt, breakfast foods, and small fresh fruit cups. This product offering is currently in a phase out process and being re-replaced with Kroger Brand product. They no longer offer this brand.

Pharmacy Group

Kroger previously owned and operated the SupeRx drug store chain. In 1985, Kroger outbid Rite Aid for the Hook's Drug Stores chain, based in Indianapolismarker, IN, and combined it with SupeRx to become Hook's-SupeRx. In 1994, Kroger decided to get out of the stand-alone drug-store business, and sold its pharmacies to Revco, which later was sold to CVS.

The Kroger Pharmacies continue as a profitable portion of the business, and have been expanding to now include pharmacies in City Market, Dillons, Fred Meyer, Fry’s, King Soopers, QFC, Ralphs, Smith’s Food and Drug, and Kroger Supermarkets.

Supermarket Petroleum Group

Since 1998, Kroger has added fuel centers in the parking lots of its supermarkets, and as of the third quarter of 2008, operated 750 of them. In the case of the Fort Wayne, Indianamarker, market, Kroger continues to operate one of its fuel centers even as its respective supermarket has closed.

Distribution/Logistics

Kroger has a 3-tiered distribution system. The 2nd and 3rd tiers, internally known as "Peyton's", service retail stores and provide promotional and seasonal products. Kroger operates five "Peyton's" which include:

  • Peytons Northern - Bluffton and Fort Wayne, IN
  • Peytons Midsouth - Portland, TN
  • Peytons Southeastern - Cleveland, TN
  • Peytons Phoenix - Phoenix, AZ
  • Peytons GHC


Kroger operates its own fleet of trucks and trailers to distribute products to its various stores, in addition to a contract with the trucking company, First Fleet.

Food distribution and buying takes place under various subsidiaries and divisions. These include:
  • Inter-American Products - private label goods
  • Wesco Foods - produce buying


Financial Services

Kroger Personal Finance was introduced in 2007 to offer various stores' branded MasterCards; mortgages; home equity loans; pet, renter's and home insurance and identity theft protection.

Market Entries and Withdrawals

Kroger had a number of stores in the Western Pennsylvania region, encompassing Pittsburghmarker and surrounding areas until the early 1980s, when the U.S. began experiencing a severe economic recession. The recession had two significant and related effects on Kroger's operations in the region. First, the industrial-based economy of the region declined in greater proportion than the rest of the U.S., which undercut demand for the higher-end products and services offered by Kroger. The second effect of the economic recession was to worsen labor-management relations which led to a protracted labor strike in 1983 and 1984. During the strike, Kroger withdrew all of its stores from the Western Pennsylvania market, including some recently opened "superstores" and "greenhouses". The new superstores in western Pennsylvania, which included beside North Huntingdon, at least one other at Cranberry Township, were Kroger's state-of-the-art facilities. They were equipped with optical (bar-code) check-out scanners that were new to the industry, and especially to the region. In addition to the usual meat/dairy/produce departments, they contained a separate bakery, deli, cheese shop, and seafood counter, amenities that have come to define the modern suburban grocery store. In an innovation that did not define future trends, the new superstores also included extensive non-foods departments that sold among other things, televisisons, and other electonics. Hence, the closure of these newly opened, trend-setting facilities represented an abrupt retreat in the region.

Kroger's exit ceded the market to lower-cost, locally owned rivals, most notably Giant Eagle and the Supervalu-supplied Shop 'n Save and FoodLand chains. (Ironically, Kroger bought Eagle Grocery company, whose founders went on to create Giant Eagle.) There has been recent speculation that Kroger may be re-entering the market since Giant Eagle and Wal-Martmarker (through the numerous supercenters Wal-Mart has opened in the Pittsburgh area in recent years) have since formed a de facto monopoly in the market as a result of Supervalu's inability to compete, as well as the launch of Kroger's Turkey Hill dairy brand in the area in 2005. Kroger still maintains a presence in the nearby Morgantown, West Virginiamarker, Wheeling, West Virginiamarker, and Weirton, West Virginiamarker/Steubenville, Ohiomarker areas where Giant Eagle has a much smaller presence and the Supervalu-supplied stores are virtually nonexistent, though in all of these cases Wal-Martmarker remains a major competitor and Aldi is the only other supermarket with any market overlap.

Kroger also experienced a similar withdrawal from Chattanooga, Tennesseemarker, in 1989. Many of these stores were sold to the local grocery chain Red Food, which was in turn bought by BI-LO in 1994. Today, Chattanooga is the only metropolitan market in Tennesseemarker that Kroger does not operate in.

In northeastern Ohio, Kroger had a plant in Solon, Ohiomarker, which is a suburb of Clevelandmarker until the mid-1980s. When that plant shut down, Kroger closed its northeastern Ohio stores in the Cleveland, Akronmarker and Youngstownmarker areas. Some of those former Kroger stores were taken over by stores like Acme Fresh Markets, Giant Eagle and Heinens.

Kroger stores existed in various Florida markets from the 1960s until 1986, when the chain decided to exit the state and sold most of its stores to Albertsons and Kash n' Karry. Kroger operated in Florida under the "SupeRx" and "Florida Choice" banners. Recently, retail analysts have begun to speculate about whether Kroger may capitalize on the misfortunes of Albertsons and re-enter Florida again, but the dominance of native Publix, Winn-Dixie and the growing force of Wal-Mart in Florida would be a tough sell for Kroger.

Kroger also had some presence in the Milwaukeemarker area in the 1950s, 1960s and early 1970s, when it exited. Speculation occurred that it would return in 2008 when Roundy's was rumored to be for sale, but it never happened.

Kroger had about 50 stores in St. Louismarker until it left the market in 1986, saying that its stores were unprofitable. Most of its stores were bought by National, Schnucks, and Shop 'n Save.

Kroger entered the Charlottemarker market in 1977 and expanded rapidly throughout the 1980s when it bought some stores from BI-LO. However, most stores were in less desirable neighborhoods and did not fit in with Kroger's upscale image. Less than three months after BI-LO pulled out, that company decided to re-enter the Charlotte market, and in 1988 Kroger announced it would leave the Charlotte market and put its stores up for sale. In an ironic twist, BI-LO bought Kroger's remaining stores in the Charlotte area. Kroger also swapped all ten of its Greensboromarker-area stores in 1999 to Matthewsmarker-based Harris Teeter for 11 of that company's stores in central and western Virginiamarker. Kroger still maintains a North Carolina presence in the Raleigh-Durham and Greenvillemarker areas. A store in Wilsonmarker which opened in 2002, but closed two years later.

Kroger also had Stores in the Charlestonmarker area with locations also in North Charlestonmarker, Mount Pleasantmarker, Goose Creekmarker, & Summervillemarker until 1988 when they sold the stores to BI-LO along with the Charlottemarker area stores.

Kroger closed almost all of its northern Michigan stores in the 1980s and 1990s. The locations in Flintmarker and the Tri-Cities were converted to Kessel Food Market beginning in 1982. These Kessel locations were bought back by Kroger in 2001; conversion was completed in 2006. In December 2008, Kroger opened a new store in Saginaw in Green Acres Plaza on State Street. This opening neccessated the closure of the original Kessel location and one other location, both just down the road from the new site. The Kroger stores in Grand Rapidsmarker and most of northern Michigan were sold to Hamady, a chain based in Flint, Michiganmarker.

Kroger exited the competitive San Antoniomarker, Texasmarker, market in mid-1993. On June 15, 1993, the company announced it would close its 15 area stores 60 days later.

Safeway (excluding the Randalls chain) exited the Houstonmarker market in early 1988. It sold many of its own properties to Kroger, the market leader in the region, which is still followed by Randalls today.

Albertsons exited the San Antonio and Houston markets in early 2002, selling many of the Houston stores to Kroger.

In the late 1990s, it acquired many stores from Super Fresh as it exited many markets in the South.

Long the dominant grocer in western Virginia, Kroger entered the Richmond, Virginiamarker, market in 2000, where it competes against market leaders Ukrop's and Food Lion. Kroger entered the market by purchasing 20 Hannaford stores that either already existed or were being built in Richmond as well as the competitive Hampton Roadsmarker market where it now competes with Farm Fresh, Harris Teeter, and Food Lion. The Hannaford locations in these markets were purchased from Delhaize by Kroger as a condition of Delhaize's acquisition of the Hannaford chain, which had previously competed against Food Lion, also owned by Delhaize. Wal-Mart Supercentersmarker are also major competitors in both markets, and the chain briefly competed against Winn-Dixie, which has now exited Virginia.

In 2004, Kroger bought most of the old Thriftway stores in Cincinnati, Ohiomarker, when Winn-Dixie left the area. These stores were reopened as Kroger stores.

Although Kroger has long operated stores in the Huntsvillemarker-Decaturmarker area of northern Alabamamarker (as a southern extension of its Nashville, Tennesseemarker, region), it has not operated in the state's largest market, Birminghammarker, since the early 1970s, when it exited as a result of intense competition from Winn-Dixie and the local Western Supermarkets.

Advertisements

"Right Store. Right Price." and "More Value for The Way You Live"are the current advertising slogans for Kroger and most other chains owned by the Kroger company. Probably the best known advertising slogan in the company's history was "Let's Go Krogering," which was accompanied by a jingle of the same name. It still appears on the bottom of some stickers which are placed on large items, handed out to children in stores (just like banks give lollipops to children). Other previously used slogans included "Your Total Value Leader," "Kroger, Where It Costs Less to Get More," "Kroger, Count on Us."

Criticisms

Food Contaminations

On October 11, 2007, food manufacturer ConAgra Foods asked stores to pull its Banquet and generic brand chicken and turkey pot pies due to 174 cases of salmonella poisoning in 32 states being linked to the consumption of ConAgra pot pies, with 33 people hospitalized. By October 12, a full recall was announced, affecting all varieties of frozen pot pies sold under the Kroger brand name, as well as Banquet, Albertson’s, Food Lion, Great Value (sold by Wal-Martmarker), Hill Country Fare (sold by H-E-B), Kirkwood (sold by Aldi), Meijer, and Western Family. The recalled pot pies included all varieties in 7-oz. single-serving packages bearing the number P-9 or “Est. 1059” printed on the side of the package.

Near Fatal Incidents

On January 16, 2008, it was announced that Wayne Watson, a Denver consumer who developed bronchiolitis obliterans or "popcorn lung" after allegedly inhaling diacetyl fumes from microwaved popcorn, was suing the Kroger grocery store chain and its affiliates. In the lawsuit, filed in U.S. District Court, Watson's attorney claimed that the companies "failed to warn that preparing microwave popcorn in a microwave oven as intended and smelling the buttery aroma could expose the consumer to an inhalation hazard and a risk of lung injury."

References and Footnotes

  1. 2007 Top 75 North American Food Retailers, Supermarket News, Last accessed March 1, 2008.
  2. http://money.cnn.com/magazines/fortune/fortune500/2009/full_list/
  3. " Contact Us." Kroger. Retrieved on April 30, 2009.
  4. Dillon Companies, Inc.
  5. http://www.whiotv.com/news/17955585/detail.html
  6. http://www.progressivegrocer.com/progressivegrocer/content_display/features/beverage/e3i4fb04ccd3a536c41e4db38c5a570edca
  7. http://www.fbherald.com/articles/2008/09/03/news/doc48beee65c6a33233501057.txt
  8. http://www2.timesdispatch.com/rtd/news/local/article/CLOV13_20091012-223403/299056/
  9. Inter-American Products: Home
  10. The Kroger Co. - Operations: Manufacturing List
  11. http://interamericanproducts.com/plants/grocery.htm
  12. Hooks Drug Store Museum and Soda Fountain, Indianapolis, Indiana
  13. Kroger Pharmacy Careers
  14. The Kroger Co. - Operations: Grocery
  15. http://www.groceryec.com/kroger_divisions.htm
  16. The Kroger Co. - Corporate News & Info: Historic Timeline
  17. KPF: Great Idea Home
  18. The merchandising of this higher-value inventory may have been a net detriment to some stores. At the North Huntingdon store, several night shift employees were arrested and fired for an organized and sustained scheme involving the stealing and re-selling of electronics.
  19. Hamady Sacks and Yankee Hats, Water Winter Wonderland, Posted February 20, 2004.
  20. Kroger Press Release, May 31, 2000
  21. FTC Agreement Allows Delhaize America, Inc. and Hannaford Bros. Co. Merger of East Coast Supermarkets
  22. Associated Press [1] "Critics: ConAgra Mishandled Recal"
  23. St. Cloud Times "ConAgra Foods recalls all pot pies". Retrieved 10-13-2007
  24. http://news.findlaw.com/andrews/en/tox/20080129/20080129_watson.html.


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