Kroger Studies Combo Stores

ELLIOT ZWIEBACH

HUTCHINSON, Kan. — Kroger Co. is looking for ways to tweak its business model by exploring the advantages to be gained from combining its full-service supermarkets with its convenience stores, David Dillon, chairman and chief executive officer, told a local newspaper here.

He told the Wichita Eagle the company has been studying the possibilities for two years — since it combined a Dillon store in Greensburg, Kan., with a Kwik Shop, one of Kroger's convenience store banners, following a tornado in the area.

“It's instructive in a lot of ways,” the newspaper quoted Dillon as saying. “One of the things it's helped us see is how to combine store formats in a way that's effective for the customer.

“Whether that results in a new store format we develop elsewhere is hard to say. The more likely outcome is some of the things we've learned from that collaboration will be moved to other stores.”

For example, he said the combination prompted Kroger to introduce a program that offers discounted gas prices based on in-store purchases.

Dillon also told the newspaper he thinks it will be a couple of years before the economy recovers.

“My own personal view is, the combination of people spending a little and saving more [means] the economy will slowly recover, and it won't grow in a way we'd [like to] see as retailers until people are comfortable enough to spend again.”

Dillon also said Kroger stores have fared well in the current economy, although the battle for customers has made the industry more competitive. “When we fight for business, the customer ends up winning, and we're happy with that, too, because that's part of our strategy.”