Kroger

Beginning

In 1883, Bernard 'Barney' Kroger invested his life savings of $372 (roughly equal to $9,600 as of 2015) to open a grocery store at 66 Pearl Street in downtown Cincinnati. Pearl Street formerly existed between 2nd Street and 3rd Street. The location is now approximately where I-71 passes the Great American Ballpark.

Kroger, the son of a merchant, had a simple dictum: "Be particular. Never sell anything you would not want yourself." Kroger tried many ways to satisfy customers. He experimented with making his own products, such as bread, so that customers would not need to go to a separate bakery.

In 1929, it was rumored that Safeway would merge with Kroger.

In the 1930s, Kroger became the first grocery chain to monitor product quality and to test foods offered to customers, and also the first to have a store surrounded on all four sides by parking lots.

1950s–1960s

Beginning in 1955, Kroger began acquiring supermarket chains again, expanding into new markets. In three months, it purchased three supermarket chains:

In January 1956, the company bought out Big Chain Stores, Inc., a chain of seven stores based in Shreveport, Louisiana, later combining it with the Childs group. All of these chains adopted the Kroger banner in 1966.

During all the acquisitions, in September 1957, Kroger sold off its Wichita, Kansas, store division, then consisting of 16 stores, to J. S. Dillon and Sons Stores Company, then headed by Ray S. Dillon, son of the company founder.

In October 1963, Kroger acquired the 56-store chain Market Basket, providing them with a foothold in the lucrative southern California market. (Prior to this time Kroger had no stores west of Kansas.)

Kroger opened stores in Florida under the SupeRx and Florida Choice banners from the 1960s until 1988, when the chain decided to exit the state and sold all of its stores; Kash n' Karry bought the largest share.

1970s

In the 1970s, Kroger became the first grocer in the United States to test an electronic scanner and the first to formalize consumer research.

Although Kroger has long operated stores in the Huntsville-Decatur area of northern Alabama (as a southern extension of its Nashville, Tennessee, region), it has not operated in the state's largest market, Birmingham, since the early 1970s, when it exited as a result of intense competition from Winn-Dixie and local chains Bruno's Supermarkets and Western Supermarkets.

Kroger built an ultra-modern dairy plant (Crossroad Farms Dairy) in Indianapolis in 1972, which was then considered the largest dairy plant in the world.

Kroger exited Milwaukee in 1972, selling a few stores to Jewel. Kroger would later return in 2015 upon its acquisition of Roundy's.

Kroger entered the Charlotte 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 was pulling out of the Charlotte market and put its stores up for sale. Ahold bought Kroger's remaining stores in the Charlotte area and converted them to BI-LO.

1980s

Kroger had a number of stores in the Western Pennsylvania region, encompassing Pittsburgh and surrounding areas from 1928 until 1984 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. One of them was that the highly cyclical manufacturing-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, causing 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," selling these stores to Wetterau (now part of SuperValu), who promptly flipped the stores to independent owners while continuing to supply them under the FoodLand and Shop 'n Save brands. Kroger's exit ceded the market to lower-cost, locally owned rivals, most notably Giant Eagle and the SuperValu-supplied grocers. (Kroger purchased Eagle Grocery company, whose founders went on to create Giant Eagle.) Kroger still maintains a presence in the nearby Morgantown, West Virginia, Wheeling, West Virginia, and Weirton, West Virginia/Steubenville, Ohio, areas where Giant Eagle has a much smaller presence and the SuperValu-supplied stores are virtually nonexistent, though in all of these cases, Walmart remains a major competitor and Aldi is the only other supermarket with any market overlap.

Kroger entered the competitive San Antonio, Texas, market in 1980 but pulled out in mid-1993. On June 15, 1993, the company announced the closure of its 15 area stores.

The chain closed several stores around Flint, Michigan, in 1981, which were converted by local businessman Al Kessel to a new chain called Kessel Food Markets. Kroger bought most of these stores back in 1999 and began reverting them. Several other Michigan stores were sold to another Flint-based chain, Hamady Brothers, in 1980. The Hamady acquisition was short-lived.

In 1982, Kroger sold the 65-store Market Basket chain it had operated for several years in southern California. The stores were reverted to the Boys Markets branding, after acquiring the chain. Boys Markets was acquired by the Yucaipa Companies in 1989. When Yucaipa acquired Ralphs, the Boys brand disappeared.

In 1983, The Kroger Company acquired Dillon Companies grocery chain in Kansas along with its subsidiaries (King Soopers, City Market, Fry's and Gerbes) and the convenience store chain Kwik Shop. David Dillon, a fourth-generation descendant of J. S. Dillon, the founder of Dillon Companies, became the CEO of Kroger.

In northeastern Ohio, Kroger had a plant in Solon, Ohio, which is a suburb of Cleveland, until the mid-1980s. When that plant shut down due to high local Union labor costs, Kroger closed its northeastern Ohio stores in the Cleveland, Akron, and Youngstown areas. Some of those former Kroger stores were taken over by stores like Acme Fresh Markets, Giant Eagle, and Heinens.

Kroger opened and had about 50 stores in St. Louis 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 also experienced a similar withdrawal from Chattanooga, Tennessee, 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 Tennessee in which Kroger does not operate.

1990s

In the 1990s, Kroger acquired Great Scott (Detroit), Pay Less Food Markets, Owen's Market, JayC Food Stores, and Hilander Foods. Additionally, the Houston market was strengthened when Kroger bought several stores from AppleTree Markets, which were former Safeway stores in early 1994.

In 1998, Kroger merged with the then fifth-largest grocery company Fred Meyer, along with its subsidiaries, Ralphs, QFC, and Smith's.

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

Kroger also swapped all ten of its Greensboro, North Carolina-area stores in 1999 to Matthews, North Carolina-based Harris Teeter, for 11 of that company's stores in central and western Virginia. Kroger still maintains a North Carolina presence in the Raleigh-Durham area. In the Raleigh-Durham area, Kroger closed its North Raleigh store in the Wakefield Commons shopping center on July 9, 2011, because the location failed to meet sales expectations. After the closure, Kroger will operate 16 stores in the Triangle. Kroger had a store in Greenville from the 1980s until 2010 when it sold it to Harris Teeter. A store in Wilson opened in 2002 but closed two years later.

2000s

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

In 2001, Kroger acquired Baker's Supermarkets from Fleming Companies, Inc.

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

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

In 2007, Kroger acquired Scott's Food & Pharmacy from SuperValu Inc.

In 2008, Kroger began a partnership with Murray's Cheese of New York City. Murray's Cheese counters within Kroger stores sell a variety of artisanal cheese from all parts of the world.

2010s

In 2011, Kroger sold its Hilander Foods chain to Schnucks. Schnucks has since re-branded the chain and closed one store with two more locations closing on May 31, 2014.

On July 9, 2013, Kroger announced its acquisition of the 212 stores of Charlotte-based Harris Teeter in a deal valued at $2.5 billion and assumed $100 million in the company's outstanding debt. Harris-Teeter's stores are in eight Southern states, with a major portion of them in its headquarters state of North Carolina. Doing so, Kroger acquired Harris Teeter's click and collect program which allows online ordering of groceries. Some industry experts see this as a competitive move against online grocers such as AmazonFresh. The Harris Teeter acquisition marks Kroger's return to the Charlotte market after a 25-year absence.

On September 20, 2013, it was announced that David Dillon would be retiring as CEO of the Kroger Co. effective January 1, 2014, to be succeeded as CEO by W. Rodney McMullen, then current COO of the company, and that David Dillon would remain on as Chairman of the Board through the end of 2014.

In 2013, Kroger announced the spouses of company's unionized workers would no longer be covered by the company's insurance plan. The company cited the Patient Protection and Affordable Care Act as a prime reason for the move. The benefit cut affects roughly 11,000 workers in Indiana. The company announced in April 2013 that full-time employees would maintain their health insurance benefits.

On March 3, 2015, Kroger announced it will enter Hawaii, having registered with the state as a new business in February 2015. The move had been in the planning stages, as it was planning to expand there in 2006 but withdrew after it had already submitted registration. Kroger, which is in the process of looking for locations to open its first store, will face competition from Honolulu-based rivals Foodland and Times; major retailers Safeway, Wal-Mart, and Costco; Japanese-owned Don Quixote; and Department of Defense-owned DeCA Commissaries.

On May 1, 2015, Kroger announced the acquisition of the 7-store Hiller's Market chain in Southeast Michigan, and that it would operate all but one of those stores under the Kroger banner.

In June 2015, Kroger eliminated the Harris Teeter brand from the crowded Nashville, Tennessee market, where its growth had been stunted by aggressive competition since it entered with six stores in the early-2000s. Kroger has traditionally had a market-leading presence in Nashville, and initially promised to keep the five remaining Harris Teeter stores open when it acquired the chain, but later said the market "did not support Harris Teeter's future business plans." Two Harris Teeter stores were closed outright, and three closed temporarily while being converted to the Kroger brand (one of these would undergo a major remodeling and replace a neighboring Kroger store).

On November 11, 2015, Kroger and Roundy's announced a definitive merger, bringing Roundy's and its primarily Wisconsin based chains under Kroger ownership. The merger is valued at $800 million, including debt. The acquisition, which brought Kroger back to Wisconsin after a 43-year absence, will retain the Roundy's, Pick 'n Save, Mariano's, Metro Market and Copps names, along with its Milwaukee operations.

In January 2017, Kroger announced plans to hire 10,000 permanent employees nationwide over the next year.

In February 2017, Kroger withstood large community protests after announcing the closing of two smaller-sized Louisville-area stores. Despite high store volumes and high population densities, the Old Louisville (lease expiration) and Southland Terrace stores closed.

On February 7, 2017 it was announced that Kroger Co. had purchased Murray's Cheese.

Supermarket operations

In the early 2000s Kroger began offering discounts to customers ages 59 and up, but they were discontinued by 2017.

Combination food and drug stores

Multi-department stores

Price impact stores

Marketplace stores

Jewelry stores

Convenience stores

Convenient care clinic

Former chains

Kroger Marketplace

Kroger Marketplace is a chain of big-box stores. The brand was introduced in 2004 in the Columbus, Ohio, 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, Kmart, Target, Walmart, and Albertsons, and modeled after Kroger-owned Fred Meyer, these stores contain multiple departments. In addition to the grocery department, they usually contain a Fred Meyer Jewelers, Starbucks, Donatos Pizza, and an in-store bank, as well as sections for toys, appliances, home furnishings and bed and bath, 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 for 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 were planned in 2007, one in Middletown (which opened in April 2007, after the old store was razed and made part of the current parking lot) and one in Englewood.

In 2011, the Elder Beerman in Centerville, Ohio was demolished, and a new marketplace has been built in its place. It has a fuel center and opened on December 8. This marketplace is the largest Kroger store ever built to date at 147,000 square feet.

Two more stores opened in the Cincinnati area, in the Northern Kentucky suburbs of Hebron and Walton which were completed in November 2008. Three Kroger Marketplace stores in Kentucky opened in 2009, two in Lexington and one in Newport. Another Marketplace opened in Beavercreek, Ohio. A Mount Orab, Ohio, store opened in the spring of 2010. Kroger opened a new 60,000 sq ft (5,600 m²) store in North Augusta, South Carolina. In 2015, a 145,000 square foot Marketplace was opened in the Cincinnati suburb of Oakley.

The first Kroger Marketplace store in Texas opened on October 9, 2009, in the Waterside Marketplace in Richmond, Texas. The second Kroger Marketplace store in Rosenberg, Texas, opened on December 4, 2009. The third opened in Frisco, Texas, in early 2010. The fourth, in Willis, Texas, opened on August 11, 2011. Other Kroger Marketplace stores in Texas are in Little Elm, Texas; Fort Worth's Alliance Town Center; Wylie, Texas; and Mansfield. Also, recently added to the list is Wylie, Texas. and Baytown, Texas.

The first Kroger Marketplace store in Tennessee opened in Farragut, Tennessee (a small suburb near Knoxville) at the end of 2008, and a second store in Thompson's Station, Tennessee, about 20 miles (32 km) south of Nashville, opened in early 2009. A third location opened in Gallatin, Tennessee, on March 11, 2010.

The first Kroger Marketplace in Arkansas opened in August 2010 on Chenal Parkway in Little Rock, Arkansas.

The first Kroger Marketplace in Virginia opened on Midlothian Turnpike in Richmond, Virginia, on the site of the former Cloverleaf Mall on December 6, 2012. Another Marketplace opened in Virginia Beach, Virginia, at the site of a former Super Kmart, on July 31, 2013. The third location opened in December 2013 in the Staples Mill shopping Center in Henrico County. A fourth location opened on October 15, 2014, in Portsmouth, Virginia, at the site of the former I.C. Norcom High School.

The first Kroger Marketplace in Indiana opened on September 29, 2011, on Dupont Road on Fort Wayne's northwest side. This store is a rebuilt Kroger Food & Drug. A second Kroger Marketplace opened on October 4, 2012, from a rebuilt Scott's Food and Pharmacy in the Village at Coventry on the southwest side of Fort Wayne. These two stores are part of a $100 million expansion project in the Fort Wayne area. In October 2016, it was announced that a Kroger Marketplace will open in La Porte, Indiana within the NewPorte Landing development. Construction of the new 123,000 square foot store is expected to begin early in 2018.

The first Kroger Marketplace in Michigan opened on June 14, 2013, at 3462 W Sterns Rd in Bedford Township. Formerly a Kroger store, the square footage increased from 68,000 to 133,000 square feet. It carries toys, home essentials, apparel and shoes in addition to groceries.

Manufacturing

In addition to stocking a variety of regional brand products, The Kroger Company also employs one of the largest networks of private label manufacturing in the country. Thirty-seven plants (either wholly owned or used with operating agreements) in seventeen states create about 40% of Kroger's private label products. Similar to most major supermarket retailers, Kroger uses a three-tiered private label marketing strategy. One private brand emphasizes no-frills products at the lowest possible price, another is intended to be comparable to leading national brands but a better value and the third is a premium (often organic) brand.

Dairies

Kroger operates 16 dairies, 1 ice cream plant, and 2 cheese plants:

Bakeries

Kroger operates 6 bakeries, 2 frozen dough plants and 1 deli plant:

Grocery items

Kroger operates 5 grocery and 2 beverage plants:

Meat plants

Kroger operates 2 meat plants:

Private brands

Kroger brand products are produced and sold in three quality tiers:

P$$t..., Check This Out... and Heritage Farm

The P$$t..., Check This Out... and Heritage Farm line of products was introduced in 1981 by the name of Cost Cutter and was known for its near-generic product labeling. It was then succeeded by FMV, which was a backronym to mean For Maximum Value, originally meaning Fred Meyer Value. In early 2007, Kroger replaced FMV with the Kroger Value brand. The Kroger Value brand was phased out in 2014. It offers staple products such as sugar, flour, bread and canned goods at the lowest price for that particular product in the store. Though some of these products (such as their cheese made with water and partially hydrogenated soybean oil) use a lower-quality manufacturing process, other products appear to be indistinguishable from their banner brand equivalent (P$$t... sugar and Kroger sugar, for example) other than the price.

Kroger has expanded the line to many other items, such as bread, coffee, tea, ice cream, paper towels, bleach, dog and cat food, and other food and household items. Most Kroger Value brand items were bilingually labeled (in English and Spanish); however, the new P$$t..., Check This Out... and Heritage Farm are not.

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, he or she 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.

Simple Truth Organic

Simple Truth Organic is a brand offered to compare with other organic brands with often simpler packaging and is becoming larger in 2014 as a part of Kroger's marketing. For the first time, Kroger is delving into making their own gluten-free products including flour mixes, bread, etc.

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

Dairy

Deli

Drug & General Merchandise

Frozen Food

Grocery and General Merchandise

Whole Health (Nutrition)

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.

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 Indianapolis, Indiana, and combined it with SupeRx to become Hook's-SupeRx. In 1994, Kroger decided to exit the stand-alone drugstore business and sold its SupeRx stores to Revco, which later was sold to CVS.

Today, Kroger operates more than 1,948 pharmacies, most of which are located inside its supermarkets. 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, Harris Teeter, 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. As of 2015, Kroger operated 1,360 supermarket fuel centers. In 2006, Kroger introduced a new common logo for all of its convenience store chains that is now also used at the fuel centers of all of its supermarket chains—a rhombus with a white, stylized image of the continental United States in the center bordered by four colored areas: dark blue representing the Pacific Ocean, red representing Canada, green representing the Atlantic Ocean, and yellow representing the Gulf of Mexico.

Movie rentals

Most Kroger locations feature Redbox movie rental kiosks. Previously, some Kroger locations featured kiosks from The New Release (aka Moviecube); most of these kiosks have since been replaced by Redbox kiosks. Also, until 2012, Kroger locations in the Columbus, Ohio, area featured kiosks by Blockbuster Express (originally DVD Play).

Distribution and logistics

Food distribution and buying takes place under various subsidiaries and divisions. These include:

Kroger operates its own fleet of trucks and trailers to distribute products to its various stores, in addition to contracts with various trucking companies.

Financial services

Kroger Personal Finance was introduced in 2007 to offer branded Visa cards; mortgages; home equity loans; pet, renter's and home insurance; identity theft protection; and wireless services. In 2011, Kroger dropped its contract with MasterCard and now offers store credit and debit cards through Visa.

i-wireless (Wireless services)

i-wireless is a national private label wireless service provider sold in over 2,200 retail locations within the Kroger family of stores across 31 states. i-wireless allows customers to accrue minutes on their i-wireless phone in exchange for using their shopper's card on qualifying purchases. The i-wireless service functions over the Nationwide Sprint Network. Customers can choose from monthly, unlimited or pay-per-use plans that do not have contracts, activation fees, or the ability to roam.

Controversies

In 2008, Greenpeace started ranking America's major supermarket chains on their seafood sustainability practices because, according to Phil Radford, Greenpeace U.S. CEO, "three quarters of global fish stocks are suffering from overfishing, and 90% of top marine predators are already gone." Criteria included the number of threatened fish species supermarkets sold, their seafood purchasing policies, and ocean legislation policies they supported. In 2013, Kroger was noted for carrying 17 out of 22 red list species, four of which are top-tier red list species.

In 2014, Moms Demand Action for Gun Sense in America, a national gun control organization backed by former New York Mayor Michael Bloomberg, began a campaign that seeks to pressure the Kroger chain to ban the open carry of firearms in all of its stores. The group decided to take action in response to demonstrations by open carry activists in Kroger stores in Ohio and Texas, and after conducting research that identified more than a dozen shootings on Kroger property since 2012. Kroger rebuffed their demand, stating, "If the local gun laws are to allow open carry, we'll certainly allow customers to do that based on what the local laws are. We don't believe it's up to us to legislate what the local gun control laws should be. It's up to the local legislators to decide to do that. So we follow local laws, we ask our customers to be respectful to the other people they are shopping with. And we really haven't had any issues inside of our stores as a result of that."