Showing posts with label Kroger Co. Show all posts
Showing posts with label Kroger Co. Show all posts

Tuesday, November 12, 2013

Kroger to spend $150 million on Texas expansion


Dive Brief:
  • Kroger’s will spend $150 million during the next two years on a large-scale expansion of its presence in the Dallas-Fort Worth area.
  • The company plans to add five new Marketplace stores and to increase the size of three existing Kroger Signature stores.
  • Other stores in the area are slated for remodeling.
Dive Insight:
Kroger’s Texas expansion comes as the company nears the completion of its acquisition of Harris Teeter, and as Chief Executive Officer David Dillon prepares to retire at the end of the year. The Texas investments may indicate that the succession team, including incoming CEO Rodney McMullen plan to double-down on existing markets, rather than invest in further acquisitions …at least for now.
Recommended Reading:
View original article on Fooddive.com here: 

Wednesday, November 6, 2013

Kroger could grow by building stores, not just buying them



Kroger Co. will look at growing by building its own stores just as much as buying them, CEO David Dillon told a group of investors and analysts on Wednesday at the company’s investor conference.
“We look at M&A (mergers and acquisitions) as one of the vehicles we can use to go into new markets and one of the vehicles that can add fill-in,” Dillon said. “There’s not a preference. Sometimes you have a choice and sometimes you don’t. We pick a strategy based on the fact of the situation.”
Mike Ellis, Kroger’s (NYSE: KR) senior vice president of retail divisions, added that Kroger CFO Mike Schlotman has told company executives that as long as the financial performance of new stores can meet Kroger’s targets, it doesn’t matter which route it takes to expand. Ellis will become president and COO on Jan. 1,when Rodney McMullen takes over for the retiring Dillon as CEO.
Dillon also talked about Kroger’s hesitance to make too big of a push into home delivery, a stance Kroger executives have talked about in the past. Amazon.com has said it will start offering home delivery of groceries on the West Coast, but Kroger has been dubious that fresh goods can easily be delivered in a practical manner and that many customers want home delivery.
“We do expect some change in that environment,” Dillon said of home delivery. “The issues ultimately come down to what does the customer want and how can it be provided? Nothing has changed, except the customer’s interest might be changing.”
Dillon also said Amazon is different because its stock is judged on revenue and not on the cash flow it produces, as Kroger is.
McMullen added that Kroger has spent plenty of time and effort studying home-delivery models in Europe.
“There are markets out there that are more mature than the U.S. that you can learn from,” McMullen said.
Dillon told a story about sitting in a vendor-sponsored meeting 20 to 25 years ago that was also attended by Lee Scott, who later became Walmart Stores’ CEO. Faith Popcorn, a futurist, said at that meeting that groceries would shift to almost all home delivery within five to 10 years. That obviously didn’t happen.
“I wouldn’t be too quick to assume that the leap to home delivery ends up replacing everything,” Dillon said. “I think a large percentage of customers still like to get out and have that interaction with friends and neighbors as they walk through the store.”
Schlotman said Kroger is still on track to wrap up its acquisition of Harris Teeter Supermarkets Inc. (NYSE: HTSI) by its target of the end of its fiscal year on Feb. 1. He’ll lead the integration effort.
“A lot of work has already happened,” he said, adding much can’t take place until theFederal Trade Commission approves the deal.
Kroger is working on a list of items and prioritizing them, much as it did with the Fred Meyer acquisition in 1998. It developed an A list and a B list and focused on the A-list items first. When those were done, the B-list items moved up.
“That way you don’t get distracted from the most important things by good ideas that are secondary,” he said.
Kroger also reconfirmed its earnings guidance for the year. It still expects to generate same-store sales growth of 3 percent to 3.5 percent and earnings per share of $2.73 to $2.80.
It updated its labor situation in a Securities and Exchange Commission filing along with the presentation. It will negotiate a deal with the United Commercial and Food Workers union for Cincinnati employees later this year and has reached a tentative agreement with that union in Seattle, it said. It also plans to address its underfunded pension plan.
Written By:

Staff Reporter-Cincinnati Business Courier
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Thursday, May 16, 2013

A powerful use for spoiled food - Kroger Co.'s clean-energy production facility

A powerful use for spoiled food - Kroger Co.'s clean-energy production facility

Kroger Co.'s anaerobic digester in Compton takes unsold food from Ralphs and Food 4 Less and converts it into 13 million kilowatt-hours of electricity a year.


May 15, 2013, 6:40 p.m.

What happens to the 40% of food produced but never eaten in the U.S. each year, the mounds of perfect fruit passed over by grocery store shoppers, the tons of meat and milk left to expire?

At Ralphs, one of the oldest and largest supermarket chains on the West Coast, it helps keep the power on.
In a sprawling Compton distribution center that the company shares with its fellow Kroger Co. subsidiary Food 4 Less, organic matter otherwise destined for a landfill is rerouted instead into the facility's energy grid. Though many grocery stores have tried to cut down on food waste and experiment with alternative energy, Kroger says it's the first supermarket company in the country to do both simultaneously.

The technology that helps transform moldy chicken and stale bread into clean electricity is known as an anaerobic digester system. At the 59-acre Compton site, which serves 359 Southern California stores, more than 100 onlookers gathered Wednesday to watch the system go to work.

Several chest-high trash bins containing a feast of limp waffles, wilting flowers, bruised mangoes and plastic-wrapped steak sat in an airy space laced with piping. Stores send food unable to be donated or sold to the facility, where it is dumped into a massive grinder — cardboard and plastic packaging included.

After being pulverized, the mass is sent to a pulping machine, which filters out inorganic materials such as glass and metal and mixes in hot wastewater from a nearby dairy creamery to create a sludgy substance.
Mike Vriens, Ralphs vice president of industrial engineering, describes the goop as a "juicy milkshake" of trash.

From there, the mulch is piped into a 250,000-gallon staging tank before being steadily fed into a 2-million-gallon silo. The contraption essentially functions as a multi-story stomach.

Inside, devoid of oxygen, bacteria munch away on the liquid refuse, naturally converting it into methane gas. The gas, which floats to the top of the tank, is siphoned out to power three on-site turbine engines.
The 13 million kilowatt-hours of electricity they produce per year could power more than 2,000 California homes over the period, according to Kroger.

Excess water from the digester is pumped out, purified and sent into the industrial sewer. Leftover sludge becomes nutrient-rich organic fertilizer, enough to nourish 8,000 acres of soil.

The so-called closed-loop system was developed by Boston start-up Feed Resource Recovery and offsets more than 20% of the distribution center's energy demands — all without producing any pungent odors.
The program helps Kroger reduce its waste by 150 tons a day. The trash otherwise would have been sent to Bakersfield to be composted, hauled away six times a day by diesel trucks traveling 500,000 miles a year.
Kroger won't say exactly how much it spent on the anaerobic digester but estimates that it will offer an 18.5% return on the company's investment. The project, over its lifetime, could help the grocer save $110 million. The supermarket giant is considering similar technologies for its La Habra and Riverside facilities and other Kroger locations nationwide.

The grocery chain's move, some four years in the making, comes amid heated debate over the nation's food and energy supply.

In August, the Natural Resources Defense Council reported that 40% of food in the U.S. goes uneaten — the equivalent of 20 pounds of food per person per month. The waste is shuttled to landfills, where it contributes to 25% of the country's methane emissions.

Some grocers have tried to cut back on garbage by putting less food out on display and even composting leftover products. Northern California chain Andronico's Community Market sells aesthetically marred but still edible produce at a discount. The Austin, Tex., store In.gredients says it sends less than a pound of waste to landfills each month by offering reusable and compostable containers in-house.

Other chains try to reduce their environmental footprint through clean-electricity projects. Whole Foods Market said solar energy helps power stores in Berkeley, Brentwood and elsewhere. Wal-Mart is testing wind turbines, installing solar panels and fuel cells and says three-quarters of its California facilities use some form of green energy.

But in recent years, amid high waste disposal costs and uncertain energy prices, anaerobic digesters have gained favor. The technology has been proposed as a fuel source for data centers, farms, government buildings and other sites.

Nick Whitman, president of Feed Resource Recovery, said Kroger's new anaerobic digester in Compton may help encourage future installations in more urban areas.

"We've had to solve some really critical problems — sanitation, efficiency and reliability issues — that have plagued anaerobic digestion and prevented its wider adoption in the U.S.," he said Wednesday.

"We've been able to bring digestion out of the farms and off the composters and into cities and industrial centers."