Supermarket chain Kroger
Kroger realized it had to adjust according to customers' changing needs, and came up with a Customer 1st strategy through which it has tried to cut costs and pass on the benefits to customers. Lower prices, discounts, reward points with options to redeem at fuel pumps -- Kroger is going all out to lure customers.
Peers like SUPERVALU
Kroger has met success with its customer-oriented moves. Its first-quarter sales rose nearly 6% from the year-ago period, and identical-store sales climbed 4.2%. Compare this with SUPERVALU's negative same-store sales figure of 1.9% or Safeway's
The giant retailer is also doing well with its store brands, which now represent more than a quarter of its grocery division sales. Kroger is continuously adding to its list of store-brand products (the latest being its Private Selection snack chips, available in 13 flavors). This isn't really surprising as these exclusive brands are better money makers than national brands. Which explains why Safeway is also trying to boost margins by taking the house brands route.
If internal initiatives weren't enough, industrial spats have added to Kroger's good fortunes. Kroger has been gaining from Walgreen's losses. The company's pharmacy division outperformed the company's own expectations, thanks to Express Scripts
The Foolish bottom line
Peers can emulate Kroger's strategies, but the biggest grocery retailer in the U.S. continues to hold its own. And I love the way Kroger keeps just about every player in this space on its toes. Its latest victim isn't even a grocery retailer. Green Mountain Coffee Roasters
Some biggies (read: Wal-Mart) might be reaching out to customers through price-comparing advertisements, but Kroger knows how to do it right the silent way, with great deals and cheap fuel, much the same way Foolish favorite Costco keeps winning. I strongly recommend adding the grocery retailer to your personalized stock watchlist to stay updated on all its news and analysis. Click here to add Kroger.
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