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Kroger is the largest grocery chain in the United States with revenue of $100 billion in 2018 . Kroger is also one of the largest employers in the country with 220,000 associates working at more than 2,500 stores and distribution centers across 25 states. Kroger’s success stems from a strong foundation established by its founder, George W. Childs. As a 19-year-old college student, George Childs began selling produce from his father’s store in Cincinnati, Ohio. Fast forward to today and George W. Childs Company Limited is known as Kroger now. Kroger has become a household name for being one of the most reliable grocery chains in America because it continuously invests to grow its business and meet changing customer demands. If you ever considered working for Kroger or any of their franchise partners, then this article is for you! A great place to start would be understanding how an organization like Krogger builds out their supply chain network so they can continue growing organically and through acquisition opportunities. This explains how they identify new growth opportunities, evaluate target companies based on specific factors such as market size, quality of suppliers and competitors, cost savings potential and long term growth possibilities.
What does Kroger do to build out their supply chain network?
Kroger focuses on the fresh produce supply chain and has over 9,800 suppliers in its network. They source produce from over 30,000 growers and have over 100 distribution centers to support their stores. In addition to produce, Kroger also sources seafood, meat and dry grocery items from their suppliers. Kroger also sources most of its fresh food items from within 250 miles of their stores. Kroger has other verticals that support the company such as pharmacy, floral, foodservice and financial services. Each of these verticals has a collaborative relationship with Kroger to source and distribute goods. Therefore, each of these verticals also has a role in building out Kroger’s supply chain network.
How do you identify new growth opportunities for your supply chain network?
Kroger has identified areas for growth by surveying their customers. They started with customer surveys that were sent out to their customers to get feedback about their shopping experience in their stores. These surveys focused on things like customer service, cleanliness and product availability. This information helped Kroger identify areas that needed improvement. From there, Kroger expanded their survey to their suppliers to gain a better understanding of their challenges. The purpose of these surveys was to identify areas where suppliers could improve. By receiving this type of feedback from both customers and suppliers, Kroger has been able to identify specific growth areas for their supply chain network.
How do you evaluate target companies based on specific factors?
The next step for Kroger is to evaluate companies based on specific factors to determine if they are a good fit for their supply chain network. Some of these factors include industry, market size, quality of suppliers and competitors, cost savings potential and long term growth possibilities. Market size: This is a major factor for Kroger because they want to ensure they have enough supply when demand outstrips supply. In addition, they also want to make sure that the quality of the supply chains they work with is high enough to meet demand. Quality of suppliers: Kroger is committed to working with suppliers that will be a part of their long term supply chain network. Therefore, they look for a high quality supply chain that has a long history of delivering good products. Cost savings potential: This is another factor that helps determine if a company is a potential partner for Kroger. By understanding the customer demand for goods, Kroger can estimate how much it would cost to deliver goods for customers. This figure helps determine if Kroger has potential cost savings or if a partnership is a better fit.
Long term growth possibilities for Kroger’s supply chain network
As Kroger continues to build out their supply chain network, they are also looking at ways to expand their digital presence. This would include expanding their e-commerce offerings, digital grocery delivery and expanding their digital grocery offerings.
Summary
Kroger has built out one of the largest and most reliable grocery chains in the country by focusing on fresh produce, seafood, meat and dry grocery items. Kroger also has collaborative partnerships with other grocery chains to provide customers with more options. As Kroger builds out their supply chain network, they are also focused on expanding their digital presence to include expansion of their e-commerce offerings, digital grocery delivery and expanding their digital grocery offerings.
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