Kroger Adds New Divisions in South

CINCINNATI — Citing opportunities for growth in five Mid-South states, Kroger Co. has realigned its division structure, establishing new regional offices in Louisville, Ky., and Nashville, Tenn.

The Louisville division will oversee stores in most of Kentucky as well as Southern Indiana and Southern Illinois, the company said. The new Nashville division covers stores in Central and Eastern Tennessee as well as Northern Alabama.

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Kroger previously operated its Louisville and Central Tennessee stores from its Mid-South division based in Louisville. The Eastern Tennessee and Northern Alabama stores were previously overseen by Kroger’s Atlanta division. Kroger’s divisions have substantial authority for merchandising and operating decisions for stores in their areas.

“Opportunities for growth in Tennessee, Northern Alabama, Kentucky, Southern Illinois and Indiana inspired us to take this path,” Rodney McMullen, Kroger’s chief operating officer, said in a statement.

Kroger late last year said it intended to focus new store development in new markets and in “fill-in” markets where it could increase share, but the company has been careful not to tip its hand as to specific geographic areas. Keith Dailey, a company spokesman, told SN last week that Kroger had identified several fill-in markets where work is already under way, but urged caution in connecting the new divisional structure to intentions to target investment in those markets. Kroger said last year that it operated in around 30 markets in the U.S. with fill-in characteristics.

Read more: Kroger Has Cautious Outlook

Kroger’s Delta Division is currently investing heavily in Memphis, where it acquired nine stores from Schnuck Markets in 2011. A 2007 acquisition of Supervalu’s Scott’s stores in Fort Wayne, Ind., sparked targeted investment in that market. McMullen in a conference call last month referenced Fort Wayne as an example of Kroger’s success in fill-in strategies, doubling market share there over five years.

Rick Going has been named president of Kroger’s Nashville division and Calvin Kaufman has been named president of the Louisville division. Going is currently president of the Michigan division. Kaufman is currently group vice president of Kroger manufacturing.

Dailey last week also said the new divisions would not have direct impact on Ruler Foods, the discount concept Kroger is testing in Indiana, Ohio and Kentucky. Those stores are operated by Kroger’s Jay C division in Seymour, Ind.

Kroger currently operates 19 Ruler Foods stores, many at converted Jay C locations. The stores emphasize low-cost, self-service shopping including cart rental, in boxes of 10,000 to 15,000 square feet. They differ from Kroger’s Food 4 Less discount stores in Chicago area, which typically are larger, warehouse style “price-impact” stores, Dailey said.

“We’re learning from Ruler Foods how to connect in a more meaningful way to value-conscious customers,” Dailey said.