Kroger Announces $150 million Growth Initiative

By Sam Lewis

New Marketplace stores, remodeled locations, and fuel centers highlight expansion efforts

America’s largest grocer, Kroger has announced it will be investing $150 million in North Texas. The company plans to build five new Marketplace stores, expand three additional locations, open several new fuel centers, and remodel some existing Kroger stores.

Included in the growth initiative are Marketplace locations — providing not only groceries and produce, but items for the home like kitchen, bedroom, and bathroom décor, small appliance, home office supplies, and toys — in Forney, Bartonville, North Richland Hills, Lewisville, and Granbury. Expansions will occur at Kroger stores in Flower Mound (growing by 22,000 square-feet and a fuel center), Irving (37,000 new square-feet along with an addition to the fuel center), and Rockwall (receiving 17,000 new square-feet of retail space). “Dallas is a market that continues to attract new residents and retailers because of its economic strength and stability,” says Bill Breetz, president of Kroger Southwest. Construction of new stores and renovations and expansions to current locations are expected to be completed by 2015. The growth is expected to create more than 1,700 jobs.

Execs at Kroger say they are actively looking to expand in both new and existing markets. This is supported by growth in money allocated for expansions and the opening of new stores. Over the last 12 months, Cincinnati-based Kroger has sped up its expansion plans, adding $200 million to its $2 billion allotted for annual capital expenditures. In addition to the Dallas-area expansions, Kroger has expanded in Cincinnati and Toledo, OH, Memphis, TN, and Houston, TX since summer. Driving these expansions is the opening of its Marketplace concept stores. Normally about 125,000 square-feet, Kroger uses these as a “one-stop shopping” to capitalize on the many different areas that interest customers in an effort to improve the customer experience. “Kroger is a company that is focused on smart, strategic growth and providing a highly-satisfied customer shopping experience,” says Breetz.

As one of the Dallas area’s top grocers, the move toward expansion is an aggressive effort to move the company closer to the top of the ranks. “We've operated here (the Dallas area) since 1958. In that period, we've grown our footprint to 85 stores and 43 fuel centers,” says Breetz. If the Dallas area continues to show economic stability and growth, it’s likely Kroger will power its expansion efforts there passed 2015 taking aim at becoming, and maintaining the title of North Texas’ top grocery retailer.

Achieving this might be easier said than done as Kroger faces stiff competition from the area’s other top grocer’s — Tom Thumb and Walmart. The latest growth initiatives from Kroger are likely an effort to take back the throne of Groceryland. Walmart entered the grocery selling arena in 1998 with three Arkansas stores. In 2005, Walmart had taken control of nearly one-fifth of the grocery market, and by 2009 it had become the largest grocery retailer in the U.S. with 51 percent of the market. This year-by-year growth in the grocery market from the world’s largest retailer marks a tough road for Kroger. But if Kroger has anything to say about it, the expansion efforts will certainly give Walmart a run for its money.

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