Dive Brief:
- Kroger will invest $97 million in its Michigan stores this year, according to the Detroit Free Press. The company said it will remodel 11 stores, add three new fuel centers and open two new stores.
- One of the new stores will operate as a Kroger Marketplace, featuring kitchenware, baby items, clothes and toys as well as groceries. Kroger Pickup will also be introduced at 20 additional locations in Michigan.
- Kroger will also close down a location in Dearborn, Michigan on May 18 due to financial instability, the company told the Detroit Free Press. A spokesperson said the store has been losing money for some time. Another Kroger located across the street will remain open.
Dive Insight:
Kroger has been clear that it wants to be a growth business and has invested accordingly, but this latest investment in brick-and-mortar is a nod to the ongoing importance of the in-store experience — which Kroger built its business on.
The retailer may be riding rough waters in Michigan due to competition from supercenter chain Meijer, which has many similar in-store services and offerings including a wide selection of fresh products, home delivery and pharmacy. Meijer is open 24 hours a day and has 241 stores compared to Kroger's less than 150 locations in Michigan. By adding new features to its store, the grocer can put up a stronger front against competitors.
America’s largest supermarket chain has been on a bit of a roller coaster ride lately. Its most recent earnings were disappointing, with profits dropping nearly 10% from the year prior. Share prices have dropped five of the last eight quarters as the company has invested in online efforts, The Wall Street Journal reported.
On the other hand, Kroger’s digital sales grew 58% in fiscal 2018, signaling a positive direction for the company’s efforts to strengthen its e-commerce offerings. The company has made changes in its executive ranks to better align with its digital strategy and support its data-driven transformation. It has also made progress on tech-centered initiatives like moving its driverless delivery pilot from Scottsdale, Arizona to Houston and the construction of its first Ocado automated fulfillment center.
Along with efforts to boost e-commerce, retailers are dutifully refreshing their stores and product assortments. From regional chains such as Tops Market and Weis Markets to grand flagship stores under Whole Foods and Albertsons, grocers large and small are addressing every aspect of the shopping experience to stay competitive.
