American Retail History Series: Kroger

The Kroger Company

 "OUR MISSION is to be a leader in the distribution and merchandising of food, health, personal care, and related consumable products and services. By achieving this objective, we will satisfy our responsibilities to shareowners, associates, customers, suppliers, and the communities we serve."

                                                                                                             - Company Mission Statement


    Founded by Bernard Kroger of Cincinnati, Ohio in 1883, what would become the Kroger Grocery & Baking Company (in 1902) originally began as the Great Western Tea Company. Kroger was a coffee and tea salesman for the Imperial Tea Company. After being denied partnership in the firm, he'd go to open stores for British Crown's Ceylon plantations in present day Sri Lanka .  Just two years later, he'd grow the one store into a chain of four stores.

      During a time most other grocers were purchasing bread, cakes and other baked goods from independent bakeries, the company in 1901 decided to fulfill its own baking needs and entered into manufacturing, becoming the first grocery store with it's own bakery. 

    When the store incorporated in 1902 as the Kroger Grocery & Baking Company there were about 40 store locations. The company would increasingly add to its food processing capacities and in 1904 purchased Nagel meat company & packing house that allowed its first in store meat counters to debut. The company would continue on its path of expansive growth.

     This growth still didn't look like the Kroger we know today. That would not come until about 1916 when the chain would introduce the concept of self-service. Shop keepers were still pulling customer selections from behind the counter bulk stocks, true customer service. 

Also common during the early twentieth century were deliveries from the milk and bread man. Kroger too, was making its fair share of deliveries. A fleet of about 200 horse & carriage were active around Ohio and Northern Kentucky to and from the 136 store locations. 

 The horse and buggy would be replaced by (75) Ford Model T's in 1913. 

     The 1920's would see the company expand beyond its stomping ground of the Cincinnati area. In 1928, just as with the A&P company founder, Kroger would retire selling his interest in his namesake company to the Lehman Brothers, Henry, Mayer & Emmanual Lehman. 

The next year, the company would reach its apex of 5,575 stores with its expansion method of acquiring competing stores versus building new ones. The chain would consume 28 chains in just under a year and a half. The street corner grocery was becoming a thing of the past. The chain had become the 2nd largest retailer in the country. 

      In 1930, the Kroger namesake would pass away as the company would again pioneer another grocery store first, with the creation of the Kroger Food Foundation to test food quality. This set a high standard, apparently good enough to be included in the  governments G.I Joe's food rations during WWII. (The store produced the plum pudding) The company would assume its present operating title, The Kroger Company in 1946.  Acquisitions of smaller chains and manufactures would continue, with many purchases made by the company continuing under their former, more familiar regional and local names, shown below.

(The purchase of Fred Meyer in 1999, would move the company into the number one spot as largest grocery/retailer in the country.)

 By the 1950's the store was averaging about $1 billion in sales annually. Over forty percent of sales were their own private label products being made in their own facilities. To this day the company still operates one of the largest privately held fleets of trucks. 

Another first in Kroger stores were consumer surveys and research. What began as 4000 people being interviewed about their shopping experience has become one of the largest pools of consumer data at over 10 million people.   

The company has always been at the forefront of technology. In 1972 they would be the first to test out the product scanner & bar code system and are currently perfecting QueVision, a store  inferred sensing mechanism that detects body heat upon arrival to correspond with check out lines to decrease checkout time and smart shelves that display product information and connect with smart phones.

   In 1984 the Lehman Brothers company was purchased by American Express' retail brokerage firm Shearson to form Shearson Lehman Brothers. The company would divest its financial services before spinning off again in 1993 as Lehman Brothers.  

The September 11 attacks in 2001, a year after its 150th anniversary would send the company into Manhattan where the sub-prime lending crisis would equal demise just seven years later. After filing chapter 11 bankruptcy, the company was sold off to firms like Barclays Bank (around since 1690, headquartered in London), and Nomura Holdings. 

      Today the company is the third largest retailer in the world (behind Walmart) with about $3 billion dollars in annual sales. As of 2016, the chain operates 2,796 supermarkets, superstores and department stores (of which 2,255 have pharmacies), 786 convenience stores, 326 jewelry stores, 1360 fuel centers, and 37 food processing/ manufacturing facilities. 

They fill about 180 million prescriptions per year and sale enough flowers to be considered the largest florist in the world. 

 

Works Cited

 https://www.britannica.com/topic/Kroger-Co

 http://www.thekrogerco.com/corpnews/corpnewsinfo_timeline.htm

https://www.clickz.com/grocery-retailers-focus-on-innovation-to-drive-customer-experience-new-report/101688/