Kroger
The Kroger Co., or simply Kroger, is an American retail company that operates supermarkets and multi-department stores throughout the United States.
Founded by Bernard Kroger in 1883 in Cincinnati, Ohio, the company operates supermarkets and multi-department stores across the United States through a variety of subsidiaries. As reported in company and regulatory filings, Kroger stores operate under multiple formats, including multi-department stores, supermarket “combo” stores, marketplace stores, and warehouse-style locations. In addition to its retail stores, Kroger operates manufacturing facilities, supermarket fuel centers, pharmacies, and in-store medical clinics. The company’s headquarters are located in downtown Cincinnati.
Industry publications have ranked Kroger among the largest supermarket operators in the United States by revenue, and research firms have listed it among the nation’s largest general retailers. Kroger also appears on rankings of major U.S. private-sector employers. The company is included on the annual Fortune 500 list of U.S. corporations ranked by total revenue.
About two-thirds of Kroger's employees are represented by collective bargaining agreements, with most being represented by the United Food and Commercial Workers.
History
Early history (1883 to 1950s)
In 1883, 23-year-old Bernard Kroger, the fifth of ten children born to German immigrants, invested his life savings of $372 to open a grocery store at 66 Pearl Street in downtown Cincinnati. He operated under the motto: "Be particular. Never sell anything you would not want yourself." He experimented with marketing products his company had produced so that his customers would not need to patronize separate stores and farms.In 1884, Kroger opened a second location, and by 1902, the Kroger Grocery and Baking Company was incorporated. By this time, the business had expanded to 40 stores with annual sales of $1.75 million. In addition, Kroger became the first grocery chain to have its own bakery.
In 1916, Kroger company began using self-service shopping. Previously, all goods were kept behind counters, customers had to request items from clerks who would then retrieve and deliver them.
In 1929, it was rumored that Safeway would merge with Kroger. By the end of the 1920s, Kroger, through its acquisition of smaller chains, controlled more than 5,500 stores, mainly in the Midwest and South.
During the 1930s, Kroger Grocery and Baking Company became the first grocery chain to monitor product quality and to test foods offered to customers. It also became the first company with a store surrounded on all four sides by parking lots. In 1932, the company tested a pilot project after it opened a grocery store in Indianapolis. The facility, which was surrounded by a 75-car parking space, allowed the company to determine the close relationship between parking facilities and gross sales.
1950s and 1960s
Beginning in 1955, Kroger began acquiring supermarket chains, expanding into new markets. In May, Kroger entered the Houston, Texas, market by acquiring the Houston-based 26-store chain Henke & Pillot. In June, Kroger acquired the Krambo Food Stores, Inc. of Appleton, Wisconsin. In July, it purchased Child's Food Stores, Inc. of Jacksonville, Texas, and operated 25 supermarkets in Texas, Arkansas, and Louisiana.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, which consisted 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, however, failed to make significant headway, only managing a 5 percent market share. By 1982, it withdrew from the California market.
In 1965, Henke's Family Center stores were folded into the newly-created Kroger Family Center subdivision. These retail units were typically 50,000–80,000 square feet and included expanded home goods and pharmacy departments. The format was a response to the 1962 emergence of big box discount retailers including Woolworth's Woolco, Kresge's Kmart, and the Waltons' Walmart. The Family Center concept was also an answer to grocery chains creating big box grocery and variety store combos including A&P's The Family Mart and Meijer's Thrifty Acres which were also created in 1962. The Kroger Family Centers were a forerunner of the Kroger Marketplace hypermarket stores of the 21st Century.
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. The company also exited the Washington, D.C., market in 1966 after it sold its stores to another grocery chain operating in the area.
In 1967, the first bar code scanner was introduced in a Kroger supermarket in Cincinnati, Ohio. The adoption of this technology, however, was slow until the 1990s when supermarkets converted to its use.
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, 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 in Indianapolis in 1972. At the time, it was considered the largest dairy plant in the world.
Kroger exited the Chicago market in 1970, selling its distribution warehouse in Northlake, Il. and 24 stores to the Dominick's Finer Foods grocery chain.
Kroger exited the Minneapolis–Saint Paul area in 1970, selling 16 stores to Quality Foods, which rebranded the stores to Piggly Wiggly.
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.
In 1978, sixteen retail members of Parkview Markets Inc., filed an anti-trust lawsuit against Kroger.
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.Kroger sought wage rollbacks in several areas during this time period including in Western Pennsylvania, Eastern Ohio, the West Virginia Panhandle and Michigan. 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, 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 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, with Aldi and IGA affiliate Reisbeck’s Food Market.
Kroger entered the 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. From 1984 to 1986, Kroger exited the Pittsburgh, Cleveland, Akron, and St. Louis markets. The company cited that higher wages for union employees made it unable to compete.
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 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, until the mid-1980s. When that plant shut down, 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. Most of the remaining Kroger stores in eastern Missouri and west-central Illinois became a western extension of the Central Division.
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 with the nearest location being Dalton, Georgia, with 2 stores.