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Grocery chain Kroger banks on innovation

Nova Safo Mar 3, 2016
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An image from Main & Vine's Facebook page announces the opening of the store. It's an attempt by Kroger to move into the organic foods market.
Photo courtesy of Kroger

Hey, grocery shopper! Do you want some pre-made, chicken thighs with that fresh organic kale?

Fresh foods, healthy eating, pre-made meals. These are increasingly what younger shoppers want, and what the supermarket giant Kroger is now experimenting with.

Kroger, with sales of $108.5 billion in 2014 and 2,625 stores with various brand names (Ralphs, Food4Less and Harris Teeter, to name a few), may seem an unlikely candidate for the hipster or younger shopper. But the industry giant is experimenting with a new grocery store concept it is calling Main & Vine. The first, and only (so far), store opened near Seattle on Feb. 3.

“A lot of the trends you’re seeing playing out over the long term are concentrated in this store,” said Jon Springer, a retail editor at Supermarket News. He describes Main & Vine as “a store that is a little bit more focused on fresh food.”

It’s also focused on the price of that food — offering better deals than other gourmet grocers might be able to deliver, thanks to Kroger’s dominant market size and technology prowess.

In fact, Kroger became a giant in the supermarket business not just by gobbling up successful competitors, but also by turning the art of pricing into a digital, data-mining science, said Joseph Feldman, a grocery retail analyst at Telsey Advisory Group.

“There’s a lot of psychographic data, market demographic data … point of sale data … Blend that all into some big soup, and they are able to find the right price, and the right amount of product, and the right shelf height,” Feldman said.

Springer predicts that Kroger’s entry into the gourmet grocery arena, along with other chains that also want to take advantage of the changes younger shoppers are demanding, could push down prices.

Even Whole Foods is planning to woo healthy eating, price-conscious younger shoppers with newly-branded “365” stores. It has announced plans to open a handful of them in the second half of 2016.

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