KROGER TESTS NATURAL-FOOD STORE-IN-STORE IN CINCINNATI

WILLIAM SMYTH

CINCINNATI -- Kroger Co. here is testing a new natural-food store-within-a-store format, called "Nature's Market."

The 28,000-square-foot Nature's Market opened inside an 80,000- square-foot Queen City Centre unit here, in Winton Place. Kroger plans to add other sections like this one to area stores, according to published reports and industry sources.

Nature's Market offers more than 4,500 health, nutritional and organic foods.

According to a store-level source, the Market offers a full array of products, similar to a health-food store, including groceries, 18 doors of frozen food and seven doors of dairy. Groceries range from rice and pasta mixes to cereals, beverages, bars, soups and so forth.

"We have many organic foods," the source said, and noted that organic produce can be found in the produce section of the main store. The store-within-a-store also has nonfood items, like vitamins and supplements.

Nutrition and natural-food sections are not new to Kroger, and one industry source told SN that the company is one of the biggest mainstream chain buyers of natural food. But Kroger has been paying more attention to the category in the last few years, and has been adding more items in stores that have natural-food sections.

As reported in SN, about 30 Kroger stores in Atlanta are currently running a pilot program with the Organic Alliance, St. Paul, Minn., to increase organic sales, through promotions, signage and product placement.

Kroger's decision to expand natural-food coverage in Cincinnati is not a reaction to other chains that are planning to move into the Cincinnati area, according to published reports. Supermarket chains like Whole Foods Market, Austin, Texas, and Wild Oats Markets, Boulder, Colo., are both planning to build stores in greater Cincinnati.

A source from an area chain who visited the Winton Place store said that Kroger has created a full-service natural-food niche at the supermarket. "They [Kroger] really put up a nice market," the source said. "It's clean, has good signage and really offers everything to a consumer who looks for natural and organic foods. They're going to really be competitive with other chains in the natural-food and organic areas."

Organic and natural-food sales are growing at a rapid pace. According to Holly Givens, communications director for the Organic Trade Association, Springfield, Mass., organic-product sales have been increasing by about 20% every year for the last seven to eight years.

"I see more and more supermarkets including organic products in their mix," said Givens.