Could Kroger Become the Next A&P?

 

Kroger has 21 different banners.  Let’s just wonder out loud if you have 21 banners how can you have a cohesive brand message?  When you buy a brand simply to show ‘Wall Street’ growth to drive your stock price up in the end you have only 21 regional branded companies struggling to find the undercurrents of success in 21 different markets or channels of distribution, that is according to Steven Johnson, Grocerant Guru® at Tacoma, WA base Foodservice Solutions®.

With 21 different banners, Kroger is blurring the lines at the top and bottom of the market with messaging from the middle according to Johnson. Today, all 21 banners combined they still are positioned in the middle of the marketplace catering to all, focused on yesterday’s food retail positioning rather than tomorrows customer according to Foodservice Solutions® Grocerant Guru®.

Back in the day when the Great Atlantic & Pacific Tea filed for creditor protection, A&P owned Waldbaums, Food Emporium, Super Fresh, Pathmark, and Food Basics, as well as its namesake A&P stores. Ok, I know that is not 21 banners.  Nor, am I suggesting that Kroger is even low on cash. Nor, am I saying they will have to file for creditor protection. 

However, as the pandemic comes to a close watch for Kroger to begin selling banners and brands to drive cash flow. Remember it was not so long ago that Safeway had to sell of its Canadian operations, Albertsons was bought by Supervalu after losing its way.

Battle for Share of Stomach

Yes, multiple brands all focused on the middle market; just how well did that work for A&P?   Each of these brands has a seemingly greater focus on yesterday’s business model of demanding slotting fee’s rather than tomorrow’s model of grocerant niche Ready-2-Eat and Heat-N-Eat fresh food. How can that be in 2020?

WinCo has proven very successful as a low-price competitor in the western US where Kroger has been forced to reduce prices across the board at all locations over the past six months. Aldi with quality private label food products, focused on price is the fastest growing grocery store in the United States and is about to become a disruptor in California, all the while it is now opening stores in Arizona.

Foodservice Solutions®, Grocerant Guru® predicts that Kroger will struggle to compete with the newcomers WinCo and Aldi just as it has with Wegmans, Whole Foods Market Inc. and Trader Joe’s Co. So, we ask do you think Kroger can win positioned in the middle if so for how long?

This is the grocery business not brain surgery.  The vast majority of retail food customers do not want to cook from scratch, do dishes, or spend the time planning meals. They want fresh prepared meal components that can be mixed and matched into a customized family meal quickly according to our Grocerant Guru® as regular readers of this blog know.

The pandemic will end, consumers will move on. Will Kroger in four years look more like tomorrow or yesterday?  WinCo, Lidl, and Aldi are winning the hearts and minds of consumers.  We don’t think there is a difference between the Kroger story of today and the A&P story or yesterday.   

Invite Foodservice Solutions® to complete a Grocerant Scorecard or a Grocerant Program Assessment.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant   Call: 253-759-7869 or Email: Steve@FoodserviceSolutions.us