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Ten Extraordinary Things about Kroger

Those that dismiss Kroger Co. (NYSE: KR) as just a grocer are definitely missing the big picture. Kroger is now the second largest retailer in the United States behind Walmart Stores Inc. (NYSE: WMT) and is America’s largest grocer.

Kroger’s growth over the past decade has been extraordinary. The 132-year-old company has proven to be one of the most competitive, innovative and aggressive retailers in the United States. It has been able to go toe to toe with such giants as Walmart and Costco Wholesale (NYSE: COST) and win. Kroger has become a dominant force in American retail that could soon rival Walmart as the nation’s most popular grocer and discount store.
Some extraordinary facts about Kroger that you might not be aware of include:

  1. Kroger is now bigger and more profitable than such retail legends as Target (NYSE: TGT) and Sears (NYSE: SHLD), which owns Kmart and Walgreen (NASDAQ: WBA). On Jan. 31, 2015, Kroger reported revenues of $108.47 billion; on the same day Target reported revenues of $72.62 billion, and Sears reported revenues of $32.2 billion while Walgreen reported revenues of $77.52 billion on Nov. 30, 2014. In fact, only three American retailers do more business than Kroger: Walmart, which reported revenues of $485.65 billion on Jan. 31, 2015; Costco, which reported revenues of $115.64 billion on Feb. 28, 2015 and drugstore operator CVS Health (NYSE: CVS), which reported revenues of $139.37 billion on Dec. 31, 2014. CVS’s revenues are so huge because it has a large prescription processing business in addition to its drugstores. What’s truly interesting is that Kroger keeps getting bigger; its revenue grew by nearly 10% (8.55% to be exact) during 2014. In contrast, Walmart’s revenue grew by just 1.43% during the same period and Costco’s by 4.36%.

  1. Kroger now operates 3,727 stores that employ around 375,000 people in 37 states. Those stores include 2,619 supermarkets, 782 convenience stores and 326 jewelry stores.[1] Kroger also operates 37 food processing and manufacturing plants and 36 distribution centers to supply those stores with products. All those locations give Kroger 161.7 million square feet of retail space. That’s the equivalent of around 280,000 NFL regulation football fields.[2] The workforce in those stores is now so large that Kroger needs 300 different union agreements to maintain labor peace. Around 94% of Kroger’s business comes from food. The rest comes from prescriptions, jewelry and fuel sales.[3]

  1. Kroger is now the nation’s third largest operator of filling stations in the United States. As of September 18, 2014, Kroger operated over 2,000 filling stations in 37 states. Those stations included 1,330 supermarket fuel centers and 725 convenience stores.[4] Convenience stores operated by Kroger include Loaf N’ Jug, Kwik Stop, TomThumb, Quick Stop and Turkey Hill. What’s truly interesting is that Kroger has only been selling gas since 1983 and only offering fuel at its supermarkets since 1998. Yet a recent Market Service survey found that Kroger is now America’s favorite gas retailer. Kroger sold $19 billion worth of fuel in 2013.[5] One reason for this is the company’s hugely popular loyalty card program, which lets customers save 10¢ a gallon on gas for every 100 points they earn on the card. A customer earns one point for every $1 in groceries in purchases at a Kroger supermarket.


  1. Kroger operates 25 different supermarket chains in different parts of the country, including: Ralph’s (California), Harris Teeter (North Carolina, Virginia, Tennessee, South Carolina, Maryland, Delaware, Florida, Georgia and Washington, DC), Smith’s (Nevada, Idaho, Montana, Utah and Wyoming), King Soopers (Colorado and Wyoming), Scott’s Food & Pharmacy (Indiana),[6] Fred Meyer (Pacific Northwest and Alaska),[7] City Market (Colorado, Utah, New Mexico and Wyoming), Fry’s Food and Drug (Arizona), Bakers’ (Nebraska), Food 4 Less (California, Illinois, Indiana, Nevada, and Nebraska), Owens (Indiana), Dillons (Kansas and Missouri), Foods Co (California), Gerbes (Missouri), Price Rite (New Mexico), JayC Food Stores (Indiana), Pay Less Super Markets (Indiana), QFC Quality Food Centers (Oregon and Washington State), and Kroger (Ohio, Michigan, Kentucky, Tennessee, Mississippi, Alabama, Georgia, West Virginia, Texas, Virginia, Michigan and Florida).[8] That means Kroger might be operating in your neighborhood or town, and you might not know it.[9]



  1. Groceries are not the only items you can buy at Kroger stores. The Fred Meyer[10] and Kroger Marketplace[11], Dillons Marketplace, Fry’s Marketplace, Smith’s Marketplace and King Soopers Marketplace[12] stores sell electronics, jewelry, furniture, , office furniture, clothing, hardware, paint, garden items, office supplies, small appliances and toys, among other items. That means Kroger is one of the few places where you can buy a TV set, a wedding ring, a head of lettuce, a wedding cake and a gallon of milk on the same day. Brands sold at Fred Meyer include Sony, Nike, Kitchen Aid, Adidas, Nikon, Dockers and Apple.[13] At the Kroger Marketplace, you can also purchase gourmet cheese and fresh sushi. If that is not enough, Kroger also operates 326 jewelry stores under the names Littman Jewelers[14] and Fred Meyer Jewelers.[15] Some of these stores are located inside grocery stores; others are standalone locations in malls. Fred Meyer is now the nation’s third largest chain of jewelry stores.[16] If you want, you can also order fine jewelry from both Littman and Fred Meyer online. Kroger also operates its own wireless telephone company, I Wireless.[17]
  1. Kroger is the fifth largest drugstore operator in the United States with 1,947 pharmacies operating in its stores in 2013 and 2,111 pharmacies in its stores in 2014. During 2013 Kroger filled 164 million prescriptions and sold $8.3 billion worth of prescription drugs.[18] Prescriptions are not the only healthcare services you can get at Kroger; its Little Clinic subsidiary operated 110 clinics providing basic medical services provided by nurse practitioners and physicians’ assistants in 2013. Kroger planned to open 55 more new Little Clinics in 2014.[19] That means you can get a physical or a vaccination at a Kroger’s supermarket as well as a loaf of bread.


  1. To keep its stores supplied, Kroger operated a fleet of 2,770 semi-tractors and 10,500 semi-trailers in 2013. That fleet made 3,300 deliveries a day and drove almost 329 million miles in 2013.[20] Some of those trucks move merchandise across the United States and even pick some items up from suppliers in Canada and Mexico. In addition, Kroger operates fleets of smaller HomeShop delivery trucks in some cities that deliver groceries, liquor and other products directly to customers’ homes.[21] Customers order the goods online, and Kroger ships them directly from the store to the home or business.



  1. Despite its size and scope, one of the most interesting things is the places that it does not operate. There are no Kroger stores in an entire region of the country—New England—and in two of the nation’s most populous states: New York and Pennsylvania. There is just one Kroger store in the nation’s third most populous state: Florida. Kroger is also absent from some of the nation’s most populous metropolitan areas, including: New York City, Chicago, Boston, Philadelphia, Buffalo, Milwaukee, Minneapolis-St. Paul, Miami-Fort Lauderdale, Orlando, Tampa-St. Petersburg, Des Moines, Jacksonville, Madison, Tulsa City, El Paso, San Antonio and Oklahoma City. That means there is a lot of room for Kroger just in the United States.
  2. The state with the most Kroger locations is California, where the grocer operates 335 stores. The second largest number of stores is in Ohio, Kroger’s home turf, where it operates 212 stores. The state with the third largest number of Kroger’s locations is Texas, where there are 203 stores. The state with the fewest Kroger supermarkets is Florida, which has just one Harris Teeter location. Interestingly enough, there is at least one state where Kroger has a license to do business but no locations—Hawaii. On Feb. 27, 2015, The Pacific Business Journal reported that Kroger had registered as a new business with the state of Hawaii. The newspaper also reported that Kroger was looking for a Hawaii location.[22]


  1. Some Kroger stores can be huge. The multi-department stores that Fred Meyer operates in the Pacific Northwest and Alaska can have up to 165,000 square feet of floor space. All that space enables some Fred Meyer stores to carry more than 225,000 products under one roof.[23] Such a store contains a full supermarket, a hardware store, a pharmacy, a shoe store, a clothing store, an electronics store, an appliance store, a bank and a home and garden center under one roof. In contrast, the average Marketplace store has between 100,000 and 130,000 square feet of space. The average supermarket in the United States is around 76,000 square feet in size.


The extraordinary thing is that we have only scratched the surface of Kroger’s businesses here. In addition to convenience stores and supermarkets, Kroger now owns the online vitamin and organic food retailer,[24] Postal Prescription Services (a mail order pharmacy) and Kroger Personal Finance. Kroger is also the world’s largest florist, selling more flowers than any other retailer in the world.


If that was not enough, Kroger is also one of the largest food manufacturers in America; around 40% of the products found in a Kroger store are made in a Kroger factory. That continues the work of the company’s founder, Barney Kroger; he created the company’s first store brand product, sauerkraut, which was made by his own mother in the family kitchen. Later on Kroger became the first grocer in America to open his own bakery.

Yet perhaps the most extraordinary thing about Kroger is its origins. In 1883 Barney Kroger used his life savings of $372 to start a grocery store at 66 Pearl Street in Cincinnati.[25] Today Kroger has an enterprise value of $45.68 billion; not a bad return on an investment of less than $400.

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Your Blogger is a very proud holder of Kroger stock which he plans to keep for a long, long time.