The Cincinnati-based grocery chain Kroger is expanding its selection to include clothing, shoes and other related apparel lines.
The change represents the new trend of “one-stop shopping centers” where customers can find all they need under one roof, according to Serdar Durmusoglu, an assistant professor of marketing at the University of Dayton. It is also a reaction against other stores, large and small, who have begun the bulk sale of food within their stores, a relatively new phenomenon.
Kroger’s expansion could be beneficial for the Dayton community. Durmusoglu said that the expansion might result in more competitive pricing of everyday clothing items such as Hanes underwear or Levi jeans, thereby driving down regional clothing costs.
According to Durmusoglu, another benefit could be additional hires to manage the expanded selections and size of the store.
Durmusoglu also said that students will feel the benefit of the expansion in time and money saved from being able to shop for a variety of items in the same place. Irene Dickey, a lecturer in the marketing department, said she sees the biggest benefit to students in the inevitable competition between the stores, which will result in more product choices and lower prices.
“General merchandisers, drugstores and even dollar stores have been adding fresh food and more groceries to their shelves to boost customer visits, increase shopper loyalty and add to their profit margins,” Dickey said.
Dickey said this is putting significant pressure on grocers to fight for territory that was once almost exclusively theirs.
The impact has been devastating for stores like Kroger. According to an article on businessweek.com, conventional supermarkets now account for only 51 percent of U.S. grocery sales, down from 66 percent in 2000.
Kroger’s primary new grocery competition is coming from discount supercenters such as Meijer, Target, and Walmart.
“Target Corporation is remodeling up to 25 of its Arizona stores this year to have new grocery departments that feature fresh meats, produce and more,” Dickey said.
Durmusoglu said that by reaching into retail, the nation’s largest traditional supermarket chain “is taking Target and Walmart head-on on a nationwide scale and the likes of Meijer on a regional scale.”
“Their success will depend on identifying and targeting a specific market segment and offering most essential clothing to those that are already going to Kroger for grocery shopping,” he said.
According to Dickey, Kroger needs “to “grow the customer,” and “increase the average sale” in order to succeed.
Tom Norton, a junior marketing major, said he sees the potential advantages of the new selections.
“People just don’t like shopping at Walmart,” Norton said. “My roommates and I prefer going to Kroger because it’s just nicer than Walmart. If they can prove that their clothes are nicer then they can draw a lot of new student business.”
According to businessweek.com, Kroger has already launched their experimental expansion in a megastore in Mansfield, Ohio. The rest of Kroger’s 2,400 stores will be observing the trial run, along with retailing competitors across the nation to see if this is a trend that has permanence and whether they will need to alter their strategies accordingly.
