GROUP VP AT KROGER EXPECTS DIVERSE SYNERGIES

DAVID GHITELMAN

CINCINNATI -- Felicia Thornton -- recently named group vice president, retail stores, by Kroger Co. here and charged with the responsibility of identifying and coordinating "best practices" throughout the company's more than 2,200 stores -- told SN she expects to finds synergies in diverse corners of the Kroger corporate empire.

Last year, when Kroger acquired Fred Meyer, Inc., Portland, Ore., the company said it expected to realize hundreds of millions of dollars in synergies. Synergies already realized include an annual savings of $600,000 from the centralized purchase of plastic vials for prescription medicines and $2.5 million from the use of a single printer to produce all the company's advertising flyers.

Thornton told SN she expects the further synergies she discovers to be equally diverse.

For example, among the best practices the company has already identified at Fred Meyer are its "buying practices, particularly with general merchandise and nutrition," Thornton said.

On the other hand, skill at selling private-label items is a Kroger practice the company is already attempting to spread throughout the corporation.

"That was part of the discussion when we first merged," Thornton said. "Now, out here in the West, one of our priority focuses is to expand private-label sales."

She added, "Our top priority is the achievement of synergies. Our management is focused and committed to this, and we're off to a great start."

Thornton said some of the synergies she expects to find and develop will result from the size and volume-buying power of the post-merger Kroger.

"We will be able to use that in looking at utilities and going out and negotiating contracts with them," she said.

Thornton comes to her new position as a veteran of several supermarket consolidation efforts. She was a vice president at Ralphs Grocery Co., Compton, Calif., when that company acquired the southern California Food-4-Less stores. And she was still with Ralphs when that company was acquired two years ago by Fred Meyer. Thornton continues to be based in Ralphs' southern California headquarters.

And even after Ralphs became part of Kroger, a deal that was completed last May, the consolidation has gone on.

Last summer, Ralphs acquired 39 of the California units Albertson's, Boise, Idaho, was required to divest to win Federal Trade Commission approval for its takeover of American Stores, Salt Lake City.

"As we moved through these mergers, we always tried to find the best way to go to market," said Thornton.