5 things to know about Kroger, which plans to merge with Idaho’s largest company
Executives at Boise-based Albertsons Companies Inc. and Kroger announced Friday that they plan to merge the two grocery retailers.
As the state’s largest company and employer, Albertsons is well-known to Idahoans, but what about the Midwestern company with which it plans to join forces?
Here are five things you should know about Kroger.
1. Kroger is the nation’s largest grocery retailer
Barney Kroger founded his first namesake grocery store in 1883 in Cincinnati, Ohio. Now a publicly traded company, Kroger is still headquartered in Cincinnati, and today the company is considered the nation’s largest traditional grocery retailer.
Kroger operates 2,723 stores in dozens of states, according to the company’s website, and it employs nearly half a million people.
Last year, Kroger collected $137.9 billion in revenue, according to the company’s corporate profile. That ranks in the top five among U.S. grocery retailers, behind Walmart, Amazon and Costco and ahead of Albertsons, according to Foodindustry.com.
Like other food retailers, Kroger’s profits ballooned amid the COVID-19 pandemic, as fewer people dined out and instead bought food to eat at home.
Kroger’s profits have remained steady. The company saw year-to-date profit increases in the first and second quarters of 2022, according to corporate earnings reports.
2. Many brands fall under the Kroger umbrella
If you’ve never been in a grocery store called “Kroger” and are wondering how it could be the nation’s top grocer, there’s a simple explanation.
Kroger stores go by more than two dozen different names, including Fred Meyer, Food 4 Less and Smith’s Food and Drug, among others.
And the company isn’t just in the supermarket business. Kroger also operates a few dozen manufacturing plants that make dairy products, baked goods and other Kroger-brand products.
Kroger also runs thousands of pharmacies and gas stations and even sells jewelry through storefronts Littman Jewelers and Fred Meyer Jewelers.
3. Kroger is investing in e-commerce
Kroger’s corporate strategy in recent years has focused on fresh food and delivery. Like its primary competitors, Walmart and Amazon, Kroger has sought to meet growing demand for online shopping.
In 2018, Kroger partnered with Ocado Group, a British grocery technology company, to establish an e-commerce delivery network.
The network includes automated fulfillment centers in which machines collect customers’ online orders and prepare them for delivery, according to a company news release. Groceries are delivered in refrigerated vans.
The company has built, or announced plans to build, more than 20 delivery fulfillment centers across the country, mostly in the Midwest and South, according to Grocery Dive.
4. Kroger already has a presence in Idaho
Kroger operates 15 retail stores in Idaho and employs more than 3,000 people , according to the company’s state profile.
In the Treasure Valley alone, there are seven Fred Meyer grocery stores, with accompanying jewelry stores and fuel stations, in Boise, Garden City, Meridian, Eagle and Nampa. Kroger also owns stores in the Magic Valley, East Idaho and North Idaho.
The two companies operate several Spokane-area Safeway, Fred Meyer and Albertsons stores.
5. Kroger has been criticized for low wages
The Economic Roundtable, a nonprofit economic and social research group, recently surveyed more than 10,000 Kroger workers in Southern California, Washington and Colorado.
The study, commissioned by grocery labor union groups, found that many Kroger employees said they have faced housing and food insecurity. The average annual earnings of Kroger workers is less than $30,000, according to the study.
“The living and working conditions of Kroger workers have declined markedly over the past 20 years,” the study said. “Kroger’s current low-wage, part-time workforce strategy relies on poorly paid, part-time workers with constantly changing schedules.”
Meanwhile, company profits increased during the COVID-19 pandemic. Kroger earned more than $4 billion in operating profits in 2020, up $1 billion from 2019, according to the study.
The company gave its employees a $2 hourly “hazard pay” raise at the start of the pandemic, but retracted it two months later, according to Bloomberg.
The same year Kroger’s CEO, Rodney McMullen, earned about $22 million, more than 900 times the median pay for a Kroger employee, according to the study.
Kroger officials called the Economic Roundtable study “flawed” and “misleading” and released their own analysis, which noted the company pays higher wages than its retail peers.