Dive Brief:

• Kroger will open a comfort food restaurant called Kitchen 1883 late next month in Union, Kentucky, according to a press release. 
• The restaurant will feature international and American cuisine, along with cocktails and what the company calls “a community-centered atmosphere.”
• "With Kitchen 1883, our goal is to create a gathering place that offers a genuinely delicious place to relax and experience our food," Daniel Hammer, Kroger's vice president of culinary development and new business, said in the release.

Dive Insight:

Acknowledging that consumers now spend more on food at bars and restaurants than they do on groceries, Kroger joins a host of other retailers that have recently become restaurateurs, including Hy-Vee, Wegmans and H-E-B.

With just one location planned for now, Kitchen 1883 — named after Kroger’s founding year — is a low-risk investment for the largest grocery retailer in the country. But done right, the experiment could lead to a much-needed new revenue stream for Kroger, which has battled pricing pressure and a plummeting stock price of late.

Could Kitchen 1883 become a hit? Absolutely — but it won’t be easy. Operating a restaurant is a whole new ballgame for grocers, presenting staffing, operational and regulatory challenges that are quite different from day-to-day grocery work. And consumers don’t always trust that the same company they buy eggs and juice from can also cook up a juicy steak.

“Often, retailers underestimate the effort needed to shift into prepared foods and restaurant operations," Darren Tristano, president of restaurant research and consulting firm Technomic, wrote in a recent Forbes column. 

Most importantly, Kitchen 1883 needs to stand out from the competition and deliver a compelling experience for customers. Kroger knows its market demographics well, and no doubt some considerable market research informed its approach to Kitchen 1883. Craft beer and comfort food aren’t exactly revelations in the restaurant industry, but neither is the all-American fare that Hy-Vee offers at its more than 100 Market Grille locations, or that Wegmans offers at its pub concept. What matters most is execution.

If Kitchen 1883 moves beyond its single location in northern Kentucky, it will be interesting to see how Kroger handles expansion. The restaurant sits near a Kroger Marketplace location currently, but could move in-store. Elements of the concept also could make their way into the chain’s prepared food and craft beer offerings. Regardless, the grocer’s move to diversify its approach and gain more consumer dollars will be an appetizing story for observers to follow.