Table of content:

Introduction	Time Line	History
Mission Statement	Mergers	Theme: Competitive Advantage
2000 Annual Report & SEC Filings	Conclusion	References & Bibliography

Introduction:      The Kroger Co. is one of the largest retail food companies in the United States. The Kroger Co. is a dynamic organization that has made significant contributions to food and drug retailing. As a concerned and active corporate citizen, The Kroger Co. also makes important contributions to the communities. The Kroger Co. headquarters are in Cincinnati, Ohio, where were founded in 1883 by Barney Kroger. The Kroger Co.'s mission is to be a leader in the distribution and merchandising of food, pharmacy, health and personal care items, seasonal health and personal care items, seasonal merchandise and related products and services.       The Kroger Co. operate more than 2,300 grocery retail stores in 31 states under nearly two dozen banners, including supermarkets, price-impact warehouse stores, and multi-department stores, which are similar to supercenters, but offer an expanded variety of national brand appeal and general merchandise. Kroger also operates 787 convenience stores under six banners in 15 states. The Kroger Co. have 396 fine jewelry stores under names like Fred Meyer Jewelers, Littman Jewelers, Barclay Jewelers, and Fox's Jewelers. This is a high-margin business with strong cash flow. Kroger is the only major U.S. supermarket company to operate an economical three-tier distribution system. Kroger also operates 41 food processing or manufacturing facilities producing high quality private-label products that provide value for customers and enhanced margins for Kroger.

Time Line: The first store opens at 66 East Pearl Street in Cincinnati, Ohio. With 40 stores and $1.75 million in annual sales, The Kroger      Grocery and Baking Company is incorporated.  Kroger buys 14 Nagel meat markets and a packing house. Meat and groceries are sold under one roof for the first time. Kroger forms its own produce buying arm, Wesco Foods Co. The Kroger Food Foundation is established, making Kroger the first grocery company to test food products scientifically. Kroger Grocery and Baking Company officially becomes The Kroger Co. Kroger joins with six other firms to found the Top Value Stamp Co. Kroger merges with Dillon Companies, Inc. and begins a new era as coast-to-coast operator of food, drug and convenience stores, and the manufacturer of more than 4,000 food and non-food products. M&M Super Markets, Inc., Savannah, GA purchased by Kroger (11 stores). Kroger completes merger with Fred Meyer, forming a grocery powerhouse with a combined $43 billion in annual sales.

History:      In 1884, just one year after the opening of his first store, Barney Kroger was already venturing out, buying his partner’s share of the company and opening a second store in Cincinnati. This type of entrepreneurial attitude followed Kroger throughout his life, allowing the actualization of his vision - to make The Kroger Co. the largest grocery superstore in the world. It was just 1901 and Kroger’s quality-driven service was already guiding the company toward industry advantage by operating its own bakeries within their stores. One year later, Kroger was running 40 stores and pulling in an annual income of $1.75 million. By 1929, Kroger had opened 5,575 stores (the most in its history) allowing Barney Kroger to retired as active CEO and President of his million dollar corporation. At the beginning of the next decade, The Kroger Co. was under the new leadership of Albert H.  Morrill, beginning its revolutionary approach to grocery shopping. The same year, Kroger opened its “Store of the Future” featuring its own doorman in downtown Cincinnati, as well as the Kroger Food Foundation which was the first grocery company to scientifically test its products. In 1964, Kroger began its modern era. Sales reached $1 billion and within five years, the  company built its first skyscraper in Cincinnati to house its corporate office. Kroger also began to acquire its first computers in 1960 and their annual profits were doubled by 1963. Throughout the 70’s, The Kroger Co. began intense market research to better serve their customers, which resulted in the opening of their floral and deli departments, the employment of the use of “open-dating” to insure product freshness and nutritional labeling for Kroger-made products. In 1975, Kroger formed the Consumer Advisory Council and its annual income increased to $5 billion.      The beginning of the 1980’s not only provided for an increase in income for The Kroger Co., but also labeled them the second largest food retailer in the world. Lyle Everingham, then CEO and President, themed the company’s 100th Anniversary  "Where New Ideas Come to Life" and featured the acquisition and/or merger with 4 new companies within the next 15 years. Quite possibly the most notable of these joining was with the Fred Meyer Company in 1998. This merger made The Kroger Co. a “grocery powerhouse” and increased annual income to a combined total of $43 billion.      Currently, The Kroger Co. and all its affiliates make up the nation’s largest grocery retail chain. The Kroger Company’s mission statement makes plans for the company to remain leaders of their industry, not by acquiring more companies and earning high annual profits, but by continuing their dedication to their employees’ and their customers’ needs and maintaining active involvement in the community in which they have flourished.

Mission Statement:     Kroger's mission is to be a leader in the distribution and merchandising of food, pharmacy, health and personal care items,            seasonal health and personal care items, seasonal merchandise, and related products and services. Click the image below to view Kroger's Mission Statement.

Mergers:     In 1997, Fred Meyer Jewelers acquired 44 Fox's Jewelers stores. This move strengthened the company's presence in the Midwest. The one year later, Fred Meyer Jewelers acquired 123 Littman/ Barclay Jewelers located primarily along the East Coast, with outlets in New York, New Jersey, Maryland, Florida and six other states.     The Fred Meyer merger resulted in consolidating Kroger's four information system platform into two. Common enterprise systems have been installed in several Smith's stores. By 2002, Kroger expect to complete platforms for the Smith's Quality Food Centers (QFC), Ralphs and Dillon divisions. An important part of Fred Meyer's competitive advantage is its emphasis on national brand products, such as Levi's, Jockey, Arrow, Vanity Fair, Columbia Sportswear, Nike, Keds, Kitchen Aid, Krups, Sony, Pioneer, Kohler and Makita. Also included are many private-lable products that offer high-quality alternatives at lower prices.

Management Theme:     The Kroger Co., as the nation’s number one food retailer, is a perfect example of the usage of Porter’s theory on Competitive Advantage. They are focused in their pursuit if customer relationship management, and it has thus made their profits grow steadily as they offer everything their customers demand: high quality, low-cost, and timeliness in the availability of their goods and services. Even while the company was still evolving in the early stages of its development, it was attempting not just to establish its name, but to gain a market advantage. These attempts included the replacement of horse and wagon teams with Model T trucks to increase  delivery speed, philanthropic endeavors to reach the public by donating hundreds of loaves of bread a week to the poor during a particularly cold winter, as well as small touches like employing a doorman to greet Kroger customers upon entrance to the store. All of these touches provided for the development of a strong customer base by proving their concern for costumers and the community in which they live.         Kiplinger’s Personal Finance Magazine described The Kroger Co. as the biggest fish in the grocery industry, feeding on the little fish only to make itself stronger. And Kroger is maintaining its market dominance not just by eating the small fish, but by making friends with the bigger fish. In 1999, Kroger merged with Fred Meyer, a popular grocer of the West and by doing so has taken over the United States’ grocery world, with Kroger/Fred Meyer mastering the Midwest, Southeast and now the West. Plus, with the  purchasing and distribution power doubled as a result of the many mergers and acquisitions of the megagrocer, Kroger estimates that they will save $225 million over the next three years by getting goods from suppliers more cheaply and delivering them to store more quickly. “This is a substantial, long-term competitive advantage,” says Charles Cerankosky, a stock analyst with McDonald Investments.         In the large grocery industry, Kroger has asked the question “how do we compete?” and has tackled the problem head on, allowing their competitive advantage to exist in two forms. The company has acknowledged the fact that the people have the power and have reacted by giving them exactly what they want, when they want it. They have since been rewarded with a strong customer base. Kroger has also recognized that in the industry, they are many suppliors and many buyers. They have used this as an opportunity to branch out horizontally and vertically by expanding their company to include more pharmceutical and food suppliers as well as more places to sell their food and drugs. By paying attention to cost-cutting measures and customer service, Kroger has exceeded expected profits and has managed to grow more in an industry they already dominate.

2000 Annual Report, Proxy Statement & SEC Filings: To view the Annual Report in Acrobat Reader (pdf) format, click here To view the SEC Filings, use Kroger's Central Index Key (CIK), 0000056873, as the search keyword to retrieve filings such as 424B5s, 10-Ks, 10-Qs and 8-Ks from the SEC's EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database. Click here to search Or click here to go directly to Latest 10-Q and 10-K Filings To listen to live speeches and conference calls given by Kroger executive personnel webcast over the internet, or replay past calls and speeches from the Audio Archive, please click on the Street Events image.

Conclusion:     The Kroger Co.'s mission is to be a leader in the distribution and merchandising of food, pharmacy, health and personal care items, seasonal health and personal care items, seasonal merchandise and related products and services. The Kroger Company’s mission statement makes plans for the company to remain leaders of their industry, not by acquiring more companies and earning high annual profits, but by continuing their dedication to their employees’ and their customers’ needs and maintaining active involvement in the community in which they have flourished.     The company has acknowledged the fact that the people have the power and have reacted by giving them exactly what they want, when they want it. They have since been rewarded with a strong customer base. Kroger has also recognized that in the industry, they are many suppliors and many buyers. They have used this as an opportunity to branch out horizontally and vertically by expanding their company to include more pharmceutical and food suppliers as well as more places to sell their food and drugs. By paying attention to cost-cutting measures and customer service, Kroger has exceeded expected profits and has managed to grow more in an industry they already dominate.

References & Bibliography:     1) Grossman, A. “Kroger keeps its eye on the customer, convenience” Drug Store News 9 Nov. 1998: 85+.     2) Knestout, B. “Kroger: A big fish gets much bigger.” Kiplinger’s Personal Finance Magazine Jan 1999: 34-35.     3) Kroger Corporate Homepage. The Kroger Co. 2 Oct. 2001 <http://kroger.com/index.htm.>