A Look Into Kroger
Did you know that Kroger was the first grocery company to make its own bread and sell it to customers? In those days, most grocery stores procured bread from independent bakeries.
Bernard Kroger, nicknamed Barney Kroger decided to establish a bakery to cut costs and ultimately reduce prices for the customer.
Barney Kroger established and managed the Kroger Company based on three principles, innovation, food freshness, and low prices.
Fast forward 139 years later, this multinational corporation still abides by these three principles.
The History of Kroger
Kroger started with one grocery store in Cincinnati and expanded to over 2,500 outlets in 35 states.
This company has a stake in most retail industries, from groceries to pharmaceuticals to food processing and florals to meat and jewelry. Here is the story of Kroger’s beginnings.
Humble Beginnings
The tale of Kroger begins in 1883 when Barney Kroger founded this company and named it the Great Western Tea Company.
Using his life savings of $372, Kroger opened the entity’s first store at 66 Pearl Street in downtown Cincinnati. He operated this store with one motto, “Be particular. Never sell anything you would not want yourself.”
This motto would remain the company’s tenet for the next 130 years.
By 1885, Kroger had 4 stores which later expanded to 17 by 1893 and 40 by 1902.
Kroger’s expansion policy was to acquire existing grocery stores and incorporate them into his company. In 1902, Barney Kroger changed the company’s name to Kroger Grocery and Baking Co.
Bakery and Meat Market Inclusions
In 1901, Kroger established a bakery to bake bread for customers instead of sourcing from independent bakeries.
His company was the first to offer in-house baked bread. Kroger wanted to cut costs by eliminating the middlemen.
By baking bread, the company would lower its operating expenses and thus offer bread at a price lower than competitors.
In 1904, Kroger acquired Nagel Meat Markets and Packing House. This acquisition allowed the company to become the first grocery store to sell meat.
Kroger also ventured into food manufacturing by processing raw cabbage to sauerkraut and inventing a French coffee brand.
Today, the company owns 37 manufacturing facilities that make food products such as ice cream, cookies, bread, milk products, and peanut butter.
Expansion Outside Cincinnati
Kroger began expanding outside Cincinnati in the 1900s. By 1920, the company had outlets in Dayton, Columbus, Hamilton, and St. Louis.
Kroger’s expansion plan was to acquire small, financially unstable grocery chains within Kroger’s operation territories.
The company also purchased a fleet of trucks when most chain stores preferred outsourcing. This decision enabled the easy movement of goods across multiple chains.
Barney Kroger resigned from his company in 1928, a year before the stock market crash. He sold his stake in the company for over $28 million and was succeeded by William Albers, one of the executives.
At the start of the market crash, Kroger operated 5,575 stores within the United States.
Fighting the Anti-Chain Accusations
William Albers resigned as president in 1930, leaving the reigns to Albert H. Morrill. Morrill took over at a time when Kroger faced economic and political challenges.
The Great Depression was at its peak, and the public was beginning to distrust the intentions and quality of chain stores.
People complained that chain stores were putting small grocery stores out of business and selling low-quality food products.
Morrill countered these accusations by implementing policies to ensure the quality of his products.
He sent his buyers to inspect produce from the farms and established the Wesco Food Company, which would handle Kroger’s procurement processes.
Morrill also founded the Kroger Food Foundation in 1930 to test and monitor the quality of the company’s food products. This establishment made Kroger the first grocery company to test its products for quality assurance purposes.
Morrill kept encouraging customers to buy from Kroger stores while setting policies to ensure good quality.
During the 1930s, Kroger shifted from operating small street-corner grocery stores to supermarkets that sold most products under one roof. By 1935, the company operated 50 supermarkets within the United States.
Post-War Growth
Morrill passed away in 1942. Charles Robertson, the former vice president, took over as company president. His first act was to halt growth plans and focus on helping the United States with World War II.
Kroger manufactured processed pudding, fruit cake, and plum pudding cans for soldiers.
After the war, Joseph Hall took over as president. He changed the company’s name to Kroger Company and introduced the current logo.
In 1947, Kroger opened an egg-processing facility in Wabash, Indiana, and led the merger of 45 independent brands into the Kroger Company.
Mergers and Acquisitions
During Hall’s tenure as president, Kroger replaced more grocery stores with supermarkets.
He also expanded the company’s market to Minnesota, Texas, and California by acquiring supermarket chains such as Henke & Pillot, Childs Food Stores, and Krambo Food Stores.
By 1952, Kroger was making $1 billion in annual sales. In 1956, Kroger acquired Big Chain Stores in Louisiana. The company later incorporated all these chain stores into the Kroger banner.
Throughout the second half of the 20th century, Kroger continued purchasing grocery stores and supermarkets within the United States.
The highlight of all these mergers occurred in 1983 when Kroger merged with Dillon Companies in Kansas. This merger made Kroger a coast-to-coast store dealing in grocery, food, medication, and convenience products.
Kroger also merged with Fred Meyer in 1999 in a $13 billion deal that saw Kroger become one of the largest supermarket chains in the United States.
This merger was the company’s biggest since its founding.
The 21st Century
Kroger continued expanding throughout the United States through strategic mergers and acquisitions. The company entered the Virginia market in early 2000 by purchasing Hannaford.
Kroger acquired multiple companies throughout the 2000s and 2010s, including Baker’s, Harris Teeter, Hiller’s Markets, and Murray’s Cheese.
The company’s biggest competitors are Costco, Walmart, Safeway, and Whole Foods Market.
Frequently Asked Questions (FAQs)
There are a few questions people frequently search for online related to Kroger. Below are the questions and answers.
1. How big is the Kroger Company?
Kroger is the fifth largest retailer in the United States but the largest supermarket chain by annual revenue.
2. What are Kroger’s brands?
Kroger owns and operates its stores under many brands. They are Kroger, Dillons, Smith’s, King Soopers, QFC, Owen’s, Jay C, Pay Less, Gerbes, Harris Teeter, Pick ‘n Save, and Ralphs.
3. Who is bigger, Kroger or Walmart?
Walmart is larger than Kroger based on the number of grocery stores and supermarkets. Walmart ranks first among the Fortune 500 companies.
4. Is Kroger a Fortune 100 company?
Yes and Kroger currently ranks under 20 on the Fortune 100 list.
5. How many Kroger stores are there in the USA?
As of the end of 2021, Kroger owned 2,726 supermarket stores in the United States.
6. Are Kroger and Publix the same?
No, Kroger and Publix are independent grocers operating within the United States. Kroger does not own Publix.
7. How many employees does Kroger have?
Kroger has 420,000 employees as of 2022.
8. Who owns Kroger?
79% of Kroger is owned by institutional shareholders, 1.7% by company insiders, and 19.23% by retail investors.
Kroger’s largest shareholder is W. Rodney McMullen, with 3.42 million shares (0.48%).
9. How many companies does Kroger own?
Kroger owns nearly 19 independent companies under the Kroger umbrella.
10. Where is Kroger’s headquarters?
Kroger’s headquarters are in downtown Cincinnati, Ohio. This is where Barney Kroger opened the company’s first store.
Kroger Company Timeline
Kroger Company Timeline1883
Barney Kroger opens the first store in downtown Cincinnati using his life savings. He names his entity the Great Western Tea Company.
1884
Kroger opens a second store.
1885
Kroger opens two more grocery stores.
1901
Kroger establishes in-house bakeries to bake bread instead of purchasing it from independent bakeries.
1902
Kroger incorporates his company and changes its name to the Kroger Grocery and Baking Company.
1904
The Kroger Grocery and Baking Company acquires Nagel Meat Markets and Packing House and adds a meat department to the company’s stores.
1912
Kroger expands into Missouri with 25 stores.
1928
Barney Kroger resigns from the Kroger Grocery and Baking Co. and sells all his shares.
1930
The company opens Kroger Food Foundation to ensure product quality.
1942
Albert Morrill passes away while still Kroger’s president. Charles Robertson replaces him.
1946
Kroger Grocery and Baking Co. assumes its present name, the Kroger Company.
1947
Kroger opens an egg-processing facility in Wabash, Indiana.
1956
Kroger acquires Big Chain Stores in Louisiana.
1961
Kroger opens its first drugstore.
1983
Kroger merges with Dillon Companies Inc., thus becoming a coast-to-coast grocery, drug, and convenience store operator.
1999
Kroger merges with Fred Meyers Inc. in a $13 billion deal.
2001
Kroger acquires Baker’s Supermarkets from Fleming Companies Inc.
2007
Kroger purchases Scott’s Food & Pharmacy from SuperValu Inc. The company also acquires 20 Farmer Jack locations.
2012
Kroger wins the prestigious Black Pearl Award.
2015
Kroger enters the Hawaii market.
Subsidiaries
As companies grow, they purchase other smaller companies to increase their market share. Kroger owns many subsidiaries, which include the following:
- Baker’s
- City Market
- Dillons
- Food 4 Less
- Foods Co
- Fred Meyer
- Fry’s
- Gerbes
- Jay C Food Store
- King Soopers
- Kroger
- Mariano’s
- Metro Market
- Pay-Less Super Markets
- Pick’n Save
- QFC
- Ralphs
- Ruler
- Smith’s Food and Drug