Restocking Kroger

Kroger’s new initiatives seek to utilize the giant retailer’s extensive database to increase sales. David Merrefield profiles the executives heading up the effort.

David Merrefield
Restocking Kroger
February 2018
 
There’s a new dynamic going on at Kroger these days, and it all has to do with data. 
 
Kroger has big plans to use its vast data resources to fuel changes, such as redesigning stores to highlight private brands. It will also seek to become more of a broad-line retailer than a food-only retailer. 
 
These moves will put Kroger in a much-improved position to resist being swept away in the epic battle between Walmart and Amazon for supremacy in U.S. retailing.  
 
Kroger has dubbed its new initiative the “Restock Kroger Plan,” and has put a new executive team in charge of it. Let’s meet them. 
 
Appointed by Kroger Chairman and CEO Rodney McMullen to lead the effort was Mike Donnelly. He was promoted to executive vice president and chief operating officer. Previously, he was executive vice president of retail operations. Donnelly’s career includes executive stints at Fry’s Food Stores, and as a merchandising vice president at Kroger’s Ralphs division. 
 
Working with him will be Mike Schlotman, executive vice president and chief financial officer, and Chris Hjelm, executive vice president and chief information officer.  
 
As for the “Restock” plan, it features a major store-reset aimed at accenting fast-moving  product and downgrading slower-moving product. Included will be an upgrade of the “Simple Truth” organic and natural private brand line that’s exceeding all sales expectations.
 
Kroger will also increase promotional activity aimed at individual customers, through  customized coupon and recipe offers. Also to be expanded is the “ClickLink” store-pickup service for fulfillment of on-line orders. 
 
Customer-facing changes will be informed by data analytics of the Kroger Precision Marketing unit.  
 
Finally, Kroger will increase product lines by establishing nonfood store-in-a-store departments. Kroger is said to be negotiating with Ace Hardware for home-improvement sections. Clearly, numerous other lines would fit this, such as automotives, toys, electronics, beauty and fashion. 
 
Of course, fundamental restarts such as these cost a lot. So, to finance it, Kroger has acknowledged that it’s seeking a buyer for its huge convenience-store division of more than 780 stores, which yield annual sales of $4 billion. Kroger could probably reap $3 billion for the sale. 
 
Beyond that, Kroger will tone down new-store openings to liberate additional capital.  
 
So, as we’ve seen, Kroger has big plans for remaining a major player in the rapidly changing world of retail. We’ll have plenty to watch as these plans unfold. 
 
For PLMA Live, this is David Merrefield.
 
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