Kroger’s Refresh initiative

Date : 01 August 2013

Kroger has launched a new ‘Refresh’ initiative in Houston which focuses on increasing loyalty and attracting new customers through reduced prices, faster checkout, fuel discounts, locally sourced items and community involvement.

The ‘Refresh’ initiative: our view

With over 100 stores and 800,000 weekly customer visits, Houston is a key region for Kroger, where it is the market share leader among traditional grocery store operators. This initiative signals the importance of solidifying this position in the market as it faces an increasing level of competition. Retailers including Aldi, Trader Joe’s, Sprouts and The Fresh Market are investing in establishing a presence in the fourth largest city in the US. Kroger also continues to add new space in the region; this year it is investing $79m to upgrade 18 existing store locations and three fuel sites, and to open four fuel sites and a new Marketplace store.

Price reductions part of broader value enhancing package

A key element of this new initiative is the investment which Kroger is making in pricing. The retailer has lowered prices on items customers purchase most frequently including natural and organic products, fruits and vegetables, and grocery and household staples. National and private label brands are included as part of the initiative. This supports the retailer’s broader value driving programs including its digital coupon centre, Fuel Rewards and discounted pricing for generic prescriptions.

Focused on enhancing the shopping experience through reducing checkout times

Under the ‘Refresh’ initiative, Kroger is recommitting to making customers' time a priority. To enhance the shopping experience, Kroger is striving to have more registers open, especially during peak shopping times, to keep shoppers' wait time to a minimum. The checkout area has been a particular focus for the retailer with investment made in new technology which enables its stores to deliver a faster checkout experience. Following the introduction of infra red technology, the average checkout wait time has fallen from four minutes to 26 seconds.

Connecting with local and community roots

The other key elements of the ‘Refresh’ initiative is a stronger focus on locally sourced products and engaging with the communities where it operates stores. In Houston, shelf tags are being used to signpost locally sourced ranged with the tagline “From Texas to Texans.” Kroger is also launching a new $1.5m fund raising program supporting schools, non-profits and faith-based groups in Texas and Louisiana. Through ‘Kroger Community Rewards’, organisations and their supporters can enrol in the program using their Kroger Plus Card to earn funds. Every time an enrolled customer shops, they help their charity of choice raise money.

Kroger

Source: IGD Research