race between Walmart and Amazon—shell-
ing out billions for investments in China
and India, for example—could eventu-
ally force them to reduce emphasis on the
U.S., but that’s a hard thing for Kroger to
count on. Strong regional players—H;E;B
and Publix, primarily—also tend to a local
appeal that can overwhelm scale advan-
tages: Sheehan of Kantar Retail believes
Kroger still needs to address the issue of
“personalization vs. localization.”
But Restock also acknowledges Kro-
ger’s competitive set has widened beyond
supermarkets and may provide its next big
Company of;icials have said for some
time that food retail’s shrinking “share of
stomach” relative to foodservice indicates
there’s more opportunity for Kroger to gain
share from the latter than from the former.
The company is already dabbling in restaurant operations; it opened a “new American
comfort food” restaurant called Kitchen
;;;; last year and is prepping a second location. Analysts studying the Restock initiative
acknowledge additional restaurant partnerships would hardly be out of the question.
“Walmart getting better was a push.
Amazon getting into grocery was a push.
But one of the biggest drivers in moving
to Restock was the channel blurring—not
just from e-commerce, but the shift of con-
sumers spending more on food away from
home than food at home for the ;rst time
in decades,” Sheehan says. “Kroger had
great competition, both local and national,
but it was also the unexpected competition
from foodservice that got them really ask-
ing ‘ Who am I?’”
For Kroger, “rede;ining the customer
experience” has come with an effort to
more closely align its “network” behind
the idea of food as content. McMullen
often refers to the company—and its shop-
pers—as “foodies,” and many of the lay-
out changes in stores, and accompanying
messaging to consumers, highlight options
along the “What’s for dinner?” spectrum.
“Kroger’s strengths are risk-taking and
the ability to embrace an uncertain future,
as their latest moves suggest,” Stern says.
“Its weaknesses are that they are still big
and predicable from a shopper standpoint.
“They understand that winning in the
future won’t just be about being the best
supermarket chain,” he says. “They are
going to need to be the best retailer.”