Monday, March 7, 2011

Kroger: Bad Business In A Bag

No Value Here.
The news was out a few weeks ago that Kroger’s Grocery Store is not forecasting a good year.  This has some grocers concerned for the future.  It even appears to cast a dark shadow on the strength of the economy.  Kroger is after all, the largest grocery store chain in America.  It’s ability to produce profits reflects soundly on the vitality of the economy . . . or does it? 
     Is Kroger’s doing poorly this year because of recession woes, or because of bad business decisions?  I’m no CEO, but I’m willing to bet that most people don’t need 10 cans of evaporated milk in order to get the deal of the week.  Nor do people possess the ability to consume 10 boxes of Pop Tarts before the expiration date, or before MawMaw outgrows the living room Lazy Boy.  Ten of any item does not denote a “Sale” to anyone.  It merely signifies unprecedented access to large storage spaces.  
     Kroger’s no longer features the Buy One Get One Free promotions of past profitable years.  Instead many customers are faced with the option of buying 10 of one product, or paying the inflated prices which are plainly marked in two densely written price tags accompanied by legal clarifications and amendments.   Needless to say it pays to take your reading glasses. 
     The idea of economic despair because of Kroger’s future assessments is ridiculous.  Look at this Kroger promotion:  Buy a $100.00 in gift cards and get 40 cents per gallon off a fill-up at their gas pump.  Here’s the catch!  You cannot purchase a Kroger card for the $100.00 dollars.  The purchase must be cards which either  add a surcharge of $5.95 (Visa, Mastercard, American Express), cards that are of little value to an adult on a budget ( Itunes, Xbox Live, or Bear Bucks), or cards that cancel out better deals by major companies like Kohls who offer $10.00 back for every $50.00 you spend.  I’m confused.  Where’s the savings for the customer?  Is Kroger counting on their customers not being able to add?   
     The outlook is limited for the massive store chain, but not because of the economy.  American consumers are waking up.  They are asking more questions and checking that bottom line twice.  They know that Kroger’s 10 item deals are naughty, and that Buy One Get One Free without a card at Publix is nice.  
     The future is bright for American companies who take care of their customers.  Our economy is growing again, along with our buying savvy.  If Kroger’s wishes to grow with us then they will need to make positive changes, and not doomsday forecasts.  

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