The Kroger Company has some operational consolidations that have helped the company to continue reducing its overhead costs. It has further achieved this success by the consolidation of its support functions such as data processing and also accounting processes which have been consolidated into the regional operations, thus improving the company’s efficiencies as well as reducing its costs.
Management and operations of the Kroger store
The company has food stores which are the primary business, and they account for over 90% of the sales of the company. The company has convenience as well as jewelry stores and also manufacturing facilities that further contribute to the remaining total sales.
Kroger’s operations overview
- It operates grocery retail stores that are 2491 in number, and they are also located in 31 states. Its formats include the price impact warehouse stores, multi-department stores, and also supermarkets.
- Kroger holds the first or even the second position in the existing major markets.
- Kroger operates many convenient stores in sixteen states under the five banners. And its c-stores provide synergies that are valuable for the rapid expansion of the company’s fuel centers.
- The company gets a high margin business with very good cash flows from its jeweler’s stores that are under names such as Littman jewelers and also Fred Meyer’s jewelers.
- It is the only American major supermarket company that operates a here-tier distribution system that is economical.
- The company also has food processing and also manufacturing facilities that produce very high quality and private labeled products that provide value to the consumers, thus enhancing the company’s margins.
- The company also operates supermarkets fuel centers that are an addition to the one-stop-shopping strategy.
- The company also has pharmacies that are located in the combination food and drugs stores and which also provide very high-quality services at very affordable prices.
The produce and floral department have very effective and strategic marketing skills. The department ensures that the farm produce and the flowers that it supplies to the customers are fresh and of very high quality. Since the department is involved with supplying fresh products such as fresh farm produce and also vegetables, it has a cooling system that is simple to install and also very easy to maintain. This further helps to keep all its products fresh and readily available.
Similarly, the company’s deli and bakery departments have strategies put in place so that they can attract more customers to buy their products. The department has had very effective display formats for all its delicacies and products. This attractive display has attracted more customers to the department in the supermarket’s many stores. Since the company has many stores, this has expanded its geographic coverage, and the management has been very keen on the display of the company’s products so as to attract more consumers.
Similarly, just like the other departments in the Kroger Company, the grocery and dairy department have been working strategically in order to achieve maximum sales. This has made the department drastically grow and achieve more profits than the other departments. However, because of the existing competition with the other grocery stores, the department has had shrinkage in its turnover.
The company, on the other hand, has been extensively marketing its products, especially by the use of the internet as a marketing tool. This has proven to be very effective, especially since most of the customers only have to order their products online without the hassle of traveling all the way to the grocery stores.
Drug /general department
The drug and general products department has also been working toward achieving maximum profits in their business operations. The department has a cooling system that is also economical to operate, and it is ideal for the dispensation of pharmaceutical products. This ensures that all the drugs and other pharmaceutical products that are sold by the store to the customers have been well preserved for the safety of the customers.
Effective display and marketing of the company’s products in all the departments
All the departments in the Kroger Company have a very effective display format for all its products. This attractive display has attracted more customers to the supermarket’s many stores. Since the company has many stores, this has expanded its geographic coverage, and the management has been very keen on the display of the company’s products so as to attract more consumers.
The company also has very effective marketing strategies in all the departments, and this assists the organization gets more customers on the products which it supplies. Kroger has also been using the internet as a marketing tool, and this has further broadened its market scope, and it has given the company more exposure globally (Veiders 2001). The company has an effective sales and marketing team that ensures that the consumers are well informed and convinced about purchasing their products from Kroger’s stores.
Lowering the costs for maximum profits
Kroger Company has corporate brands that play a key role in the company’s merchandising strategies, thus providing the company with a competitive advantage. The company, however, manufactures its own products and lowers its costs so as to pass on the savings to the consumers. The company further reduces the costs of its products in all its departments so that it can further improve on its profits.
In various instances, the company has lowered the prices of its products, and this has made it have a huge increase and also achieve maximum profits, especially on the grocery items. However, by the company lowering its costs on aspects such as labor purchases and also operational costs, some of the costs budgets go down, but the profits are achieved maximally (Margulis, R. 2000).
The company’s three tiers corporate strategy also helps the company to generate profit margins that are enhanced, and the good better best company’s approach enables it to serve a consumer base that is broad and also diverse.
The company receives some of its products from outside suppliers, and thus it maintains good relations between the suppliers and themselves. Some of the products that it sells in its stores, such as jewels and other food products, are received under such names as Fred Meyer’s jewelers.
The Kroger Company supplies its products through a supply chain so as to reach its target consumers. The products are either manufactured by the company or received from other suppliers, and they are then distributed to the retail and wholesale chain stores (Veiders, 2001).
All the departments in the company have sanitation facilities that are of very high standards that are most often used by the customers. The company’s sanitation facilities are operated efficiently by the company.
The company has put a lot of effort into ensuring that the consumers are being provided with the best services. While on the one hand, the operational efficiency remains very significant in this company, on the other hand, the company majors on knowing its customers well so that it may be able to provide them with products that would help in meeting their needs, wants, and also preferences (Veiders, 2001).
The Kroger Company further belies that in operating its divisions under banners that have very strong ties and also brand equity. Throughout the company’s history, there have been major strategic acquisitions of some local operations, which are strong, and the company has also maintained its philosophy of keeping the merchandising decisions closest to its customers.
- Margulis, R. (2000): Fleming to Rely on a Low-Cost Supply Chain to Drive its Growth Retail News Beat journal.
- Veiders, C. (2001): FDI Examines Impact of Consumer Trends on Distribution. Supermarket News journal.