Other Goods & Services:
(offered in addition to sale of groceries)In addition to the sale of groceries, Kroger offers prepared foods, operates cafés, discount programs, grocery pickup options, fuel stations, and catering services. While the Fresh Market is significantly less diverse than Kroger in terms of additional service offerings, they have partnered with InstaCart, an online grocery delivery company, to offer personal shopping and home delivery service options (Press Room, n.d). Additionally, the Fresh Market provides weekly online recipes and videos for meal preparation using their grocery products.
Social Services:
Kroger’s previous efforts to connect with the Senior Citizen community included a Senior Day (Tuesday), in which seniors received shopping discounts as well the opportunity to participate in gatherings within the store’s café area, such as playing bingo.
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Forms of Advertising:
Three types of advertising methods are typically used: advertising on properties, across the web, or simply through word of mouth. Additionally, mailing plays a role as well – customers typically receive pamphlets that include coupons and listings of weekly discounts.
LOCATIONS AND PHYSICAL ATTRIBUTES
Typical Locations:
(e.g., town center, highway ribbon, etc.)Kroger stores are typically located in neighborhood shopping centers, serving as the anchor tenant. However, on September 25th, 2019, Kroger opened its first downtown store in 50 years, in
Cincinnati, Ohio, where its headquarters are located. The Fresh Market also tends to locate in neighborhood shopping centers, but typically in neighborhoods considered middle income or higher.
Co-location Tendencies:
Kroger stores, at least within the Richmond Metropolitan Area, include a pharmacy, as well as ATM access (SunTrust, etc.). Banks and small restaurants/shops can typically be found within the area. While the Fresh Market does not include a pharmacy, they are also commonly located within the same vicinity as banks, small restaurants, and shops.
Number of Residents & Workers in Market Area:
Supermarkets are typically located within neighborhood centers as the anchor tenant, and a full- size supermarket ranges from 45,000 to 60,000 square feet. The neighborhood center itself generally ranges from 70,000 to 90,000 square feet in total size (including the supermarket) and requires the support of 6,000 to 8,000 households in a one to two-mile radius (Steuteville, 2016).
Customer Access to Stores:
(walk, bike, car, etc.)Various methods, including cars, buses, walking, and biking.
Parking Lots and Number of Parking Spaces:
Both offer on-site parking, but number of parking spaces varies per store/location.
Community Contributions:
Kroger: Zero Hunger/Zero Waste Campaign - In September 2017, Kroger introduced its Zero Hunger/Zero Waste program to address the nationwide issue surrounding food waste and hunger. Studies show that 40 percent of U.S.-produced food goes to waste, and one out of every eight
Americans struggles with hunger/lack of food. Kroger plans to address this issue through grant funding for innovative food waste solutions, plans to increase meal donations to one billion meals in 2020 and
109 three billion meals by 2025, and ensuring that meals donated are balanced and healthy, to help improve health conditions across the nation (Zero Hunger: Zero Waste, n.d.).
The Fresh Market: 1-3-5 Food Drive - The Fresh Market supported local food banks through the 1-3-5 Food Drive during the month of May 2018. Over $425,000 was donated - the money raised from guest donations was dispersed to each store’s local food bank, supplementing the day-to-day support they provide to kids and families alike (Community Involvement & Responsibility, n.d).
CASES
Which Stores Succeed?
“In any industry, knowing your audience is the key to success. This is especially true when it comes to today’s grocery retail landscape.” - Sylvain Perrier, President and CEO of Mercatus Technologies (Perrier,
2018).
The above quote emphasizes that understanding the shopping habits and preferences of a store’s customer base plays a pivotal role in finding and maintaining success. Additionally, executives should aim to create unique shopping experiences—and remain willing to re-invent their format— without compromising signature elements in order to retain and attract customers.
Which Stores Don’t Succeed?
Dominick’s was a Chicago-based supermarket chain that was first established in 1918. The chain was successful up until the 1990’s, when traditional, sometimes independent, groceries were unable to compete with larger chains due to their mergers with larger corporations. California-based Safeway, Inc. purchased the chain in 1998 for $1.2 billion. Safeway instituted numerous changes to bring the chain in line with the way the corporate parent did business; most of these changes had disastrous effects. For example, they tried to save money by having the California office handle buying, in the process
eliminating a host of middle managers who knew the tastes of local consumers. Familiar products were replaced by the higher-margin Safeway Select house brand of products, which were foreign to Chicago consumers. Safeway ended a longstanding practice of filling customers' special-order requests, a reversal of personalized neighborhood service that had made the chain a success in the first place (Dominick's Finer Foods, Inc. - Company Profile, Information, Business Description, History, Background Information on Dominick's Finer Foods, Inc, n.d.).
Customers did not like the changes and showed their displeasure by shopping elsewhere – as a result, Dominick's market share dropped to 22.8 percent by the end of 2001. Around this time, major players such as Target, Kroger, and Walmart began to enter the Chicago market and opened stores. The sale of outdated products became a major issue in the last 2 years of the chain’s existence, attracting
110 local news coverage and driving away remaining customers. Dominick’s eventually shut down
permanently in December 2013, due to low sales and overall poor performance (CBS, 2011). Dominick’s decline and eventual closure drives home the point that, for any business to be successful, it must relate to its audience. This is even more important for local stores and franchises – national chains can test the market for new products and offerings in different regions without
experiencing a major loss in terms of customers and profits. With a local chain like Dominick’s, however, the margin for error is extremely thin. Local chains become staples of the community and play a role in shaping culture for the city and its residents – in a sense, a connection is developed between the store and its customers. This is evidenced in some of the examples mentioned above, such as filling special- order requests for customers. Safeway’s acquisition of Dominick’s led to the opposite – an upheaval of the personalized shopping experience that Chicago residents had grown accustomed to, ultimately alienating the customer base and leading to a downward spiral that put the store out of business.