Kroger Is the Largest Grocery

Kroger is the largest grocery retailer in United States with the net revenue of more than sixty billion dollar. The Kroger has established number of outlets in different states of United States 'with store formats that include grocery and multi-department stores, convenience stores and mall jewelry stores. Kroger operates under nearly two dozen banners, including Fred Meyer, Dillon's, Ralph's, King Soopers, Smith's, City Market and many others' (Robert, 2006). Since 2000 onwards the Kroger has given due consideration towards the deployment of an 'internally-supported Warehouse Management System' (David, 2000), which turned out to be successful and efficient system. The Kroger introduced rapid and instant implementation of the supply chain objectives, and a strong enhancement program meant that technological up gradation. During 2002, the company hired the services of the ESYNC for providing project resources which can support the roles and functioning of the 'Project Management, Functional and Technical Design, Testing, Training and Startup and Integration Support'. The company has developed an internal goal for itself as per which the company has to avoid any loss of production upon the implementation of the technology, and therefore every subsidiary of the organization experience 'soil project roadmap and thorough testing before go-live with the new' (Ronald, 2003). The service of the ESYNC was utilized on 'several Warehouse Management System conversions', and has exercised different tasks and reforms, including 'leadership assignments' (Ronald, 2003). The purpose of the entire exercise has been to improve and upgrade the performance of the Kroger, and such a policy was undertaken to restore, develop and strengthen the trust of the customers. During the start of 2007, the Kroger launched its Kroger Value line, which is the substitute of the for Maximum Value brand which was being offered by different outlets of Kroger. The brand was modified in white blue and red, and was replaced by typical orange-fade-to-yellow. After the acquisition of Fred Meyer with Kroger, offered Kroger with wider variety of the products including cheese made with water & partially hydrated soybean oil. The Fred Meyer was previously accused of offering low quality product at cheap rates, which adversely affected the sales activity of the Kroger. The merger was therefore an opportunity to offer the quality brands at nominal rates, far above the mark of Fred Meyer in quantitative and qualitative terms. The Fred Meyer Value has been replaced by the Kroger Value Brand, which has been responsible for offering such offerings through which Kroger brand and Kroger Value brand were sold at parallel, in homogeneity without any major difference of quality except for the packing and prices. Such an acquisition was responsible for the growing market shares of the Kroger brand, and the variety of the brands helped the Kroger to achieve market dominancy without any major competition (Susan, 2004).

Success and Failure

At the end of 2004, the total sales of the Kroger increased by six percent and reached the mark of approximately thirteen billion dollars, the total earning of the company stood at $142.7 million which is thirty percent rise as compare to the level achieved in 2003. According to David B. Dillon, the Kroger chairman and chief executive officer, 'we are very pleased with our sales performance, Kroger's identical food-store sales showed strong improvement. Our continued focus on fulfilling our customers' needs is an important part of our strategy to increase earnings through strong, sustainable identical food-store sales growth'. The company expected investment of more than $1.8 billion, excluding the negotiations of acquisitions with other consortium. Surprisingly, the Kroger was able to sustain major labor contracts without causing any halt in the normal affairs and working of the company, the labor contract encompasses the services of more than twenty thousand employees in Seattle, Cincinnati, and at Food 4 Less in southern California, the ratification of labor contract agreement without any interruption and stoppage of the work further ensured the attainment of the Kroger objective to continue progress 'toward its goal of labor cost competitiveness'. The sales of the Kroger have reached a record level of $42.7 billion, and the net earnings of the company are estimated to be $548.0 million. According to Mr. Dillon, 'Thanks to the hard work and tremendous contributions of the entire organization, Kroger have made considerable progress in a number of key areas. But there is still much work to be done. We will continue to focus on becoming more competitive in every aspect of our business so that we can provide a shopping experience that makes our customers want to return' (Susan, 2004).

The Dairy Foods Group, one of the subsidiaries of the Kroger, has recorded exceptional growth; the group has achieved expertise in the packaged ice-cream and frozen categories, frozen novelties and refrigerated juices. The company has been able to achieve good share in the market, and was able to reverse the previous sales pattern declination. The Senior Marketing Manager of the company revealed that the operation of the ninth dairy plant of the Kroger achieved 'double-digit tonnage growth' (Catherine, 2002) in wide range of dairy products. The company has been able to achieve good results in the sales of the fluid, and other juices. The success achieved by the Kroger through their production in frozen desserts arena has been associated with the implementation of the revised policies for the capitalization of its previously achieved success in the frozen yogurt category, adding Toasted Almond and Strawberry Banana varieties (David, 2000).

Confronting Challenges

The market saturation and certain limitations in this regard will be the biggest threat for the Kroger. The Kroger has been successful in procurement of the market shares at large level, and therefore the company is not under any threat or pressure from other competitors. The challenge for the Kroger has been the limitations within the services it offers, it can be expected that Kroger will find it difficult to introduce novel aspects relevant to its production which can be regarded as fundamental for the customers, and the Kroger will therefore never be able to justify or affiliate any extra usage of the products that it offer. The challenge can be confronted if the Kroger try to explore several different avenues where maximum return can be expected from minimum investment. The Kroger should necessarily develop business partnership with other industries and companies so that the company can emerge as corporate giant within few years (Randall, 1999).

Interview of Human Resource Manager