KR Overview

The Kroger Company (KR), founded in 1883 and based in Cincinnati, Ohio, operates as a food retailer throughout the United States. Kroger does business in four distinct set-ups of supermarkets. These include combination food and drug stores, marketplace stores, price impact warehouse stores and multi-department stores.

The combination stores at Kroger operate as a food store, while providing specialty items such as natural foods and organic sections, along with pharmacies, general merchandise, pet centers, and perishables, such as fresh seafood, meats and produce.

Kroger also provides full-service grocery and pharmacy departments within their marketplace stores, as well as offering general merchandise that would include electronics, home goods, outdoor living products, and toys.

The price impact warehouse stores offers the standard groceries, along with health and beauty care items, in addition to their wide variety of meats, dairy, baked goods, and fresh produce. Furthermore, the multi department stores that Kroger has established, offers additional items such as apparel, home fashion and furnishings, automotive products and fine jewelry.

Throughout many of the company’s stores, Kroger manufactures and processes food for sale in its supermarkets. With fresh deli counters, a bakery, and a seafood department, Kroger produces quality food items that customers have come to love and revere.

Currently, Kroger operates 42 manufacturing plants, mainly consisting of dairies and bakeries for their stores. These plants account for nearly 43% of all corporate brands sold throughout their retail outlets. The company currently has nearly 8,000 private label brands that their plants supply.

Before the mega supermarkets, grocery stores were descended from early trading posts, which not only supplied food, but also clothing, tools, furniture, household goods, and other needed items. From here, trading posts evolved into general stores, which became larger retail businesses.

General stores dealt mainly in the sale of dry goods, such as canned foods, flour and dried beans and usually had some form of credit offered to their customers.

At that time, perishable goods were most often sold in market places or specialty shops, while fresh meats were always obtained from the local butcher. Additionally, milk was from the local dairy, while eggs and vegetables were frequently produced by the families themselves, bartered with neighbors or purchased from the local farmer.

Throughout the U.S. in 2004, the Labor Department released the findings that showed American’s made, on average, total food purchases of 13% of their total household purchases. During that year, families spent an estimated $280 per month at grocery stores.

As of February 2008, Kroger operated approximately 2,486 supermarkets and multi-department stores nationwide, with 696 of which having fuel centers. Kroger also has approximately 782 convenience stores, under the names of TomThumb, TurkeyHill and KwikShop, and 394 fine jewelry stores, such as Barclay Jewelers and Fred Meyer Jewelry, that they currently own and operate across the nation.

As many customers are concerned with the ongoing struggle to preserve the environment and go green, Kroger replied to those desires with the opening of their first energy efficient store in Ohio back in March 2007. The newly opened store, which has lowered their energy consumption by one billion watts per year, has started to save upwards of $125 million over the course of the year by implementing natural lighting into the store.

Kroger competes primarily with Safeway Inc. (SWY), SUPERVALU Inc. (SVU) and Wal-Mart Stores Inc. (WMT).

By BetterTrades