CINCINNATI -- Calling its convenience stores “Kroger’s unsung strength,” a report by National Real Estate Investor (NREI) said that the grocer’s c-stores “are a plus for the company, since it handles the format more deftly than other grocery competitors, like Wal-Mart.”
Based in Cincinnati, Kroger owns approximately 2,780 supermarkets with 1,390 fuel centers under a variety of banners in 35 states and the District of Columbia. It also operates approximately 785 convenience stores (about 725 with fuel) under six banners in 19 states: Kwik Shop, Loaf N' Jug, Quik Stop Markets, Tom Thumb Food Stores, Turkey Hill Minit Markets and Smith’s Express. It recently added a Kroger c-store banner.
Bentonville, Ark.-based Wal-Mart Stores Inc. launched the small-format Walmart Express stores in 2011 only to pull the plug on the brand early this year.
“Wal-Mart executives did not quite get a handle on how to successfully operate the smaller format,” said the report.
Kroger does not have a lot of specific areas of business where it does exceptionally well or performs particularly poor, Kurt Jetta, CEO of Shelton, Conn.-based TABS Analytics, a research firm that specializes in the consumer products industry, told NREI. Despite the retailer’s size, Kroger avoids sprawl in the markets where it does business, he said. It enters into new markets and establishes a critical mass. After that, it tends to make sensible decisions about what store sizes are required to operate well.
“They don’t just go to the massive footprint for stores,” Jetta said. “They have a good sense of space.”
Analysts and investors had expressed lukewarm opinions about Kroger’s second-quarter 2016 performance, the report said. The company reported that total sales increased to $26.6 billion, but it was not enough to lift its entire revenue picture, which missed analyst estimates by $220 million, said NREI, citing various media reports. So while the company is not always on top, it is positioned to handle the influx of competition, the report said.
“They have a very consistent track record of trying to stay on trend,” said Jetta. “And certainly the small format is on trend.”
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