Kroger Success Story: One of the Largest General Retailers in the USA

Garima Bais Garima Bais
Jan 7, 2023 9 min read
Kroger Success Story: One of the Largest General Retailers in the USA

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Kroger.

Over a period of time, finding your daily needs quickly has become very important. People have busy lifestyles and need one place to shop for their groceries. This led to the emergence of multiple retail giants who slowly expanded their base all over the USA.

Kroger is one such online grocery and in-store retailer. It has set up various drug stores, supermarkets, marketplaces, multi-department, and jewellery stores across the country.

Started with a single grocery store in Cincinnati to now owning 2500+ outlets in 35 states they provide products like natural food, medicines, general merchandise, apparel, fresh seafood, toys, electronics, home goods, etc. Read on to have detailed information about Kroger and its business model, revenue model, startup story, founders and team, and more.

Kroger - Company Highlights

Company Name The Kroger Company
Headquarters Cincinnati, Ohio, U.S.
Industry Retail
Founded 1883
Founders Bernard Kroger
Area Served United States
Revenue $137.888 Billion (2022)
Market Cap $32.74 Billion (Jan 2023)
Website www.kroger.com

Kroger - About
Kroger - Industry
Kroger - Founders and Team
Kroger - Startup Story
Kroger - Mission and Vision
Kroger - Name, Tagline, and Logo
Kroger - Business Model
Kroger - Revenue Model
Kroger - Employees
Kroger - Challenges Faced
Kroger - Funding, and Investors
Kroger - Mergers and Acquisitions
Kroger - Growth
Kroger - Advertisements and Social Media Campaigns
Kroger - Awards and Achievements
Kroger - Competitors
Kroger - Future Plans

Kroger - About

Kroger is one of the largest retail store chains operated in the USA. It was founded by Bernard Kroger in Cincinnati, Ohio, in 1883. It is a retail company known to operate supermarkets and multi-store companies across America. Kroger currently owns around 2,800 stores in 35 various states.

The graph shows the number of stores operated by Kroger as of January 2022
The graph shows the number of stores operated by Kroger as of January 2022 

Kroger - Industry

The United States is home to some of the largest retail companies in the world. The introduction of the Pandemic and National lockdown did affect the industry revenue and was considered a pathway to introduce more e-commerce retail sales within the year.

For the year 2021, the total retail sales in the US were 6.59 billion USD. The retail trade accounts for 5.5% of the Country's GDP in total.

Different segments of the retail sector are Products (Food and Beverages, Personal and Household Care, Apparel, Footwear and Accessories, Furniture, Toys and Hobby, Electronic and Household Appliances, and Other Products), Distribution Channels (Supermarkets/Hypermarkets, Convenience Stores, and Department Stores, Specialty Stores, Online, and Other Distribution Channels), etc.

Kroger operates in the retail sector. It is a grocery retailer specializing in distributing and producing food through stores. The store offers a variety of products. However, the retail sector in the USA is vast. There are many players in the market vying for the same customer base.

Kroger - Founders and Team

Bernard Kroger founded Kroger in 1883 in Cincinnati, Ohio.

Bernard Kroger (Founder)

Bernard Kroger - Founder of Kroger
Bernard Kroger - Founder of Kroger

Bernard Heinrich Kroger was born on January 24, 1860. Kroger was born to a German immigrant couple named Johan Heinrich and Mary Gertrude. He was the fifth child out of ten children born to the couple. At the age of 13, Kroger had to quit school and went to work in order to support his family.

He used to live in a modest store that his family was running. However, during the 1873 economic recession, the store closed. He had multiple job changes before starting to work as a salesman for Imperial Tea Company.

Kroger was made the manager of one of their outlets, and he quickly transformed it into a profit-making one. He has been credited with the introduction of self-service grocery outlets.

William Rodney McMullen (Present CEO)

William Rodney McMullen - Chairman and CEO of Kroger
William Rodney McMullen - Chairman and CEO of Kroger

William Rodney McMullen was born in 1961 and is the present Chairman and CEO of Kroger. He holds a bachelor's and a master's degree in the field of accounting from the University of Kentucky. McMullen started his career as a part-time stock clerk in his local Kroger grocery store.

From there he worked as a financial analyst in the corporate headquarters in Charlotte. In 2009, McMullen was appointed as the vice chairman and COO of the company. However, for the CEO position, he ascended to the position on 1st January 2014. McMullen is also the non-executive director of Cincinnati Financial.

Kroger - Startup Story

Kroger Website
Kroger Website

In 1883, Bernard Kroger decided to set up his own store. He invested his entire savings of $372 in opening a store in Cincinnati. His product list included self-produced items that increased his credibility.

In 1884 he moved to open another store. Tasting success with this one, the company started expanding. In 1902 the Kroger Grocery and Baking Company was launched. Now the number of stores has increased, and the company is making sales of $1.75 million. Kroger then became the first retail store to have their own bakery.

Kroger - Mission and Vision

Kroger adopts a focussed approach to specific areas of retailing. Its vision statement is as follows:

β€œTo be a leader in the distribution and merchandising of food, pharmacy, health, and personal care items, seasonal merchandise, and related products and services.”

Their mission statement is:

β€œWe're on a mission to end hunger in the communities we call home and eliminate waste across our company by 2025.”

Kroger has always encouraged healthy and fresh eating. Their tagline, therefore, resonates with the same:

β€œFresh For Everyone”

Below is the logo for Kroger Corporation

Kroger Logo
Kroger Logo

Kroger adopts its signature colour, blue, to create attractive logos every now and then. The choice of blue is to signify the heritage of the brand being food savvy. It also portrays a feeling of trust and safety for the customers.

Kroger - Business Model

Kroger comes in the top 5 retail store chains operating in the USA. They have a unique methodology to get their customers onboard. Their business strategy has been to adopt a cost leadership approach. However, they do not offer low prices to get sales. Kroger reduces the operating costs so they can sell the merchandise at low prices yet make a profit.

The company gives a lot of importance to its customer’s opinions. It takes their feedback and creates products based on that information. They also use the data to stock the products needed, set affordable prices, and give them a fantastic shopping experience.

Kroger also uses the latest technologies to gain a competitive advantage over other players. For instance, in 2013, they started using a temperature monitoring system in their stores. This helped them in ensuring only fresh products for display in the store.


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Kroger - Revenue Model

Kroger generates revenue from the sales of products stocked in its stores. As per their website, the revenue of Kroger for the last quarter was $146.48 Billion. They had an operating profit of $841 million. Their digital sales showed a jump of 10%. The company is doing reasonably well and will pay the quarterly dividend without any hitch.

Kroger - Employees

Kroger is committed to giving its employees a motivating work environment. The estimated number of employees working for Kroger is believed to be around 465,000 (2022). They offer the following benefits, so their employees work for them sincerely.

Some of the benefits include Dental and health insurance, Disability insurance, a Flexible spending account, a Health saving account, Vision benefits, team building events, retirement plans, paid parental leaves, and many other facilities.

Kroger - Challenges Faced

Kroger had to face many problems due to high supply chain costs and an increase in the prices of food items. The grocers were facing the impact of inflation. Whereas, it was difficult for Kroger to know when to increase the prices.
2017 was a challenging year for Kroger. The stock prices were not up to the mark because of the increasing costs.

At present, there are a Β lot of waste items in their warehouses. The company had no clue about how to use these items. Kroger started working on a robust distribution system to ship the items before they perish.

By knowing the customer's requirements, the company would only make items that were in demand. This way, they cut down another aspect which could increase the waste inventory.

Kroger - Funding, and Investors

Kroger has made multiple investments with their most recent investment done on July 25, 2022. Other details are shared below in the table with the most recent investments done by Kroger.

Announced Date Organization Name Funding Round Money Raised
Jul 25, 2022 Kitchen United Series C - Kitchen United $100M
Nov 2, 2021 Nuro Series D - Nuro $600M
Feb 2, 2021 Everytable Grant - Everytable $1M
Jan 1, 2006 I-Wireless Venture Round - I-Wireless β€”

With regards to investors, the lead investor for Kroger is Berkshire Hathaway. They have raised $550 million with Berkshire Hathaway

Kroger - Mergers and Acquisitions

Kroger has acquired a number of organizations on its path to success. there are around 12 acquisitions noted by Kroger. The most recent oneth are shared below.

Acquiree Name Announced Date Price
Albertsons Companies Oct 14, 2022 $24.6B
Home Chef May 23, 2018 $200M
Murray's Cheese Feb 8, 2017 β€”
ModernHEALTH Jul 20, 2016 β€”
Roundy's Dec 18, 2015 β€”
Vitacost Jul 2, 2014 $280M
YouTech Feb 11, 2014 β€”
Harris Teeter Jul 9, 2013 β€”
Kessel Food Markets Dec 20, 1999 β€”
Fred Meyer Oct 19, 1998 $13B

Kroger - Growth

In the third quarter of 2022, Kroger clocked $34.2 billion in sales. The company’s sales showed a rise of 6.4% from the last year. This excluded the sales of fuel. The digital sales for the company also rose by 10%, which was due to a 34% increase in online delivery sales.

At their outstanding performance, the CEO of Kroger, Rodney McMullen, said:
β€œKroger achieved strong results in the third quarter as we continue to execute our Leading with Fresh and Accelerating with Digital strategy.”

Kroger - Advertisements and Social Media Campaigns

Kroger actively posts its ads, thus garnering enough visibility for its brand. Its latest ad focuses on human relationships and the memories that holidays bring out. They want to remind the people of the love and warmth associated with the holiday season. Kroger’s ads are usually animated and the characters used are called Kroji.

Kroger - Awards and Achievements

Some awards that Kroger has received over the years are:

  • Kroger ranked #10 on Forbes Corporate responders Top Employers in Pandemic ranking.
  • Newsweek named Kroger as one of America’s responsible companies in 2021.
  • Β In 2021 Kroger was ranked number 4 in LinkedIn's top companies of Cincinnati.
  • Computerworld mentioned Kroger as the best place to work in IT for the fourth time in a row.
  • Omnikal has listed Kroger among America’s top 50 companies offering Multicultural business opportunities.
  • WBENC recognized Kroger as being an excellent place for women to work.

Kroger - Competitors

Kroger is an established player in the retail sector. Its Competitors include some of the popular names like:

  • Amazon
  • Target
  • Rite aid
  • Costco
  • Walmart
  • Dollar General
  • Kmart
  • Safeway
  • Whole Foods Market

Kroger - Future Plans

In the coming years, Kroger will continue to focus on its in-house brands, i.e., Fresh and Our Brands. The company would also improve its digital service landscape. This would help the company to enter new areas irrespective of geographical boundaries.

Kroger would also work to achieve the Zero Hunger/Zero commitment they build their brand. The company aims to further its rising sales and get a total shareholder return of 8-11% over time.

Conclusion

Amazon is the world's biggest e-commerce retail company and is acknowledged by all. Similarly, Kroger is also one of the biggest retail companies in the USA. It was started by Bernard Kroger in 1883.

The company now holds approximately 2849 stores across the country. The current CEO of the company is Rodney McMullen. Kroger is responsible for the introduction of many revolutionary products/services in the market. Β 

FAQs

Are there Kroger stores in Florida?

Yes, Kroger owns a store in Florida. Even though the number of Kroger Stores is limited to one, it does have a store there.

Does Kroger own Winn Dixie?

No, Kroger does not own Winn Dixie. Winn Dixie was acquired by BI-LO in 2011, so it is not owned by Kroger.

What is the largest grocery chain store in Texas?

Some of the largest grocery chain stores in Texas as Family Dollar, Dollar Tree, Walmart, and Kroger.

Are Kroger stores there in all 50 states?

No, Kroger has not yet made its store available in all 50 states. The rough number of Kroger stores in states is around 42. That is Kroger is available in 42 states from 50.

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