Kroger’s Success Can Be a Model for C-Store Food Sales

Examining customer buying habits and offering healthy options has helped drive the grocer’s revenue.

December 07, 2015

CINCINNATI – Kroger has been “quietly growing its empire,” and is currently the second-largest U.S. retailer by sales after Walmart, bringing in 56% of sales from groceries, Crain’s Chicago Business reports.

In a foggy food sales climate that includes grocery chains filing for bankruptcy, Amazon diving into online grocery delivery and more people eating at restaurants than at home, Kroger is a beacon other stores can look to for lessons in success.

Last Thursday, the grocer increased its earnings forecast for the year and reported its 48th consecutive quarter of increasing sales, excluding fuel.

Kroger was one of the first traditional grocers to dive into customer buying habits and customized shopper communications, and was an early mover into organic foods. Health clinics and in-store pharmacies have been successful for Kroger, and are currently making up roughly 8% of the company’s revenue.

Aisles of “high-margin general merchandise,” like affordable, portable fireplaces, were directly copied from Walmart's supercenter. Kroger also mixes high-end products with private-label brands, often locating cheaper goods near more expensive ones to create a sense of access to a wide range of items.

Jumping on rapidly shifting changes in consumer behavior requires foresight, but in the long run it’s a behavior that can help c-stores preserve their model as well. Ultimately, Kroger has remained ambitious and continued to grow while still maintaining strong financials.

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