Kroger Looks at Larger C-Stores

NEW YORK — Kroger Co. [4] is experimenting with building larger convenience stores with more fresh food offerings as a means to ward off competition from smaller grocery formats, Mike Schlotman, the retailer’s chief financial officer, said at an investor event here last week.

Speaking at the BMO Capital Markets Farm to Market Conference, Schlotman said the Cincinnati-based company was building such stores in markets where it already operates full-service supermarkets in an attempt to replicate the success it has had integrating supermarket and convenience offerings in markets like Wichita, Kan., where Kroger has long operated the Dillon’s supermarket and Kwik Shop convenience brands.

Related story: Kroger Positioning Varies by Market [5]

Schlotman did not identify specific markets where the test is under way, although he was likely referring to the expansion of Kroger’s Pennsylvania-based Turkey Hill convenience brand into Ohio and Indiana markets where Kroger operates grocery stores. Those new stores boast expanded Kroger product lines including produce, meats and deli.

“We have built a few new convenience stores in a couple of traditional program markets to see if can replicate what’s happening in Wichita from the ground up,” Schlotman explained. “It’s a little early at this point. We don’t have the number we actually need to call it a full test, but we think there is something there.”

Schlotman described the stores as “a little bit bigger convenience stores. They would have a fresh presentation. They’d have some fresh meat, fresh produce, a little bit more in the deli than just the hot dogs on the heater or on the warmer. They’d have a little bit more of an array of [products].