In our previous blog, we studied the deliberating SWOT analysis of Publix, one of the largest U.S. regional grocery stores chains. Here we will be doing an engrossing SWOT Analysis of Kroger.
Kroger is one of the well-known American retail companies. As America’s grocer, they believe that everyone deserves to have access to fresh, affordable and delicious food, no matter who you are, how you shop or what you like to eat.
Furthermore, Kroger has been putting money into effective marketing methods. The current global situation is pushing towards digitalization, and if you’re interested in learning more, check out our Free MasterClass on Digital Marketing 101 by Karan Shah, CEO, and Founder of IIDE.
Do you know how a firm evaluates its environment? SWOT Analysis is one of the most often used approaches. In this blog, we’ll take a closer look at the SWOT Analysis of Kroger.
Before we get started with the SWOT Analysis of Kroger, let’s learn a little bit about the firm, its products and services, and its competitors.
(The Founder of Kroger Chain, Source: Worldkings)
Bernard Kroger began the Kroger supermarket chain in Cincinnati, Ohio, U.S. back in 1883. It is one of the largest supermarkets within the United States in terms of revenue of $121.16 billion for the year 2019, as well as the second-largest general retailer behind Walmart. Kroger is the 7th largest American-owned private company. And it is also placed #23 on the top 500 list of the largest firms in the United States by overall revenue.
What makes Kroger famous is its supermarkets, seamless digital shopping options, cost-effective warehouse stores, and multi-department stores, which are alike to supercenters, but offer an enlarged variety of national brand apparel and general merchandise. Kroger’s grocery stores are situated in the Midwestern and Southern United States.
|Origin||Cincinnati, Ohio, U.S.|
|No. of Employees||465,000|
|Market Cap||$ 32.92 Billion (2021)|
|Annual Revenue||$ 121.16 Billion (2019)|
|Net Income/ Profit||$ 3.11 Billion (2019)|
Products & Services by Kroger
- Supermarket Fuel Centres
- Department StoreS
- Jewellery Stores
Competitors of Kroger
- Dollar General
- Rite Aid
Now that we understand the company’s key business, let’s look after the SWOT Analysis of Kroger.
SWOT Analysis of Kroger
SWOT Analysis of Kroger is a basic method that can help a company examine what it does best right now and develop a successful future strategy. It exposes the areas where people are holding back or how competitors may profit.
With the growing neck-and-neck rivalry in membership warehouses, it is critical for organizations like Kroger to examine the business environment.
To better understand the SWOT analysis of Kroger, refer to the infographic below:
Now first let’s begin with the strengths of the company from the SWOT analysis of Kroger.
Strengths of Kroger
- Huge Business: Groceries, organic foods, jewellery, petrol, pharmacy services, and home items are just a few products and services offered by Kroger. Customers may come in and receive a lot of what they need in one place thanks to this one-stop shopping.
- Famous for Variety of Stores: Kroger also has a variety of store formats to select from, allowing customers to focus on what matters most to them. If they want to get a good deal, they will probably go to one of the price impact shops. They might go to a mixed market if they are looking for organic or high-end things. The company has grown to become the leading grocery store operator in the country due to its wide range of products and store types.
- Effective Marketing Campaigns: Kroger has made a campaign to establish its products in recent times, including in the organic market. In the year 2015, these products contributed to about half of overall revenues.
- Strong Brand in the USA: The simple reality is the company’s label is one of the most popular in the United States. Kroger profits from all these products because they typically have larger margins than conventional grocery items.
(Kroger Sees More More Digital Sales Growth in Pandemic, Source: Supermarket)
- Seamless Digital Presence: Kroger represents a seamless digital experience for its customers in the US. Even in lockdown, through orders on its e-commerce page, Kroger was delivering fresh groceries at doorsteps with delivery in as little as 30 minutes.
Bonus Tip: As you can see big brands like Kroger are listed in the top list just because their revenues were not affected with the help of the implementation of digital marketing methods. If you will learn various digital marketing methods then you can also get benefited from the same whether in terms of business growth, career growth or future opportunities.
- Private-label Products: The company’s success including its private-label products also has given it a superior negotiating power with distributors. Kroger has been able to preserve its leadership position in an increasingly competitive grocery market in the United States because of these products.
- Educated Employees: Exceedingly skilled group of workers through a hit education and gaining knowledge of applications. Kroger is investing in the education and improvement of its employees ensuing in a group of workers that isn’t always only surprisingly professional, however, additionally stimulated to reap extra.
Weaknesses of Kroger
- Higher Debt: Compared to many competitors, Kroger has a very high debt load. It has $9.6 billion in debt on its balance sheet, at the end of the calendar third period which ended on November 5th. This amounts to around 62% of total capital. This high level of debt may limit Kroger’s capacity to secure additional funding, limiting its potential to acquire new businesses. The pressure on the bottom line will continue to be pushed by high-interest charges on the debt.
- Price Drop of Few Products: Falling costs for numerous essential supermarket items, such as eggs, milk, and meats have impacted Kroger’s recent results. There is a cumulative effect because all these items are major components in preparing foods. The price downturn is expected to extend into this year, although management does not believe it will last forever.
- Deflation Environment: They recognize that this is a problem that the grocery industry as a whole is facing. As a result of the deflation environment, competitors in the sector have continued to compete on price. They observe that the company’s biggest line has been harmed by continuous softening in fuel prices, which does not affect some of its competitors because many of them do not offer fuel.
Opportunities for Kroger
- Increasing Brand Value: Customers have reacted positively to Kroger’s recent appearance in the organic goods market. Many consumers are growing more interested in health and wellbeing, and as a result, they are seeking out natural and organic foods and beverages.
- Expansion in Private Labels: Kroger’s brand has been increasing its line of these products. Kroger has quickly established itself as a strong competitor to segment leaders such as Whole Foods Market (WFM) and sells most of these items at lower pricing. Within a few years, we believe Kroger will overtake Whole Foods as the leader in organic and natural foods.
- Digital Enlargement: Kroger just launched ClickList, the service that allows users to order and purchase over 40,000 products online and pick them up at a company store. Many people, particularly parents with small children, have found the service to be ideal. As more consumers shop for groceries online, this platform which has already proven to be a huge success should become an even bigger element of the company’s overall strategy.
- Overseas Expansion: Deliberate overseas expansion plans across different countries can amplify the business of Kroger.
Threats to Kroger
- Extreme Competition: The grocery store industry is highly competitive, with fierce price competition, industry segmentation, rapid expansion, and non-traditional competitors entering the market. Walmart and Target (TGT) are two of these non-traditional companies that have been boosting their food-related sales. These large stores profit from cost savings and can gain even more leverage by lowering prices.
- E-commerce Stores: Kroger’s revenue may be impacted when these stores expand their food offerings. Traditional online retailers such as Amazon.com have also grown their position in the online grocery business, posing a threat to Kroger’s new e-commerce activities.
- Seasonal Alterations: The demand for notably worthwhile products is seasonal and any not likely occasion during the height season may also impact the profitability of the organization in the short to medium term.
This ends our engrossing SWOT analysis of Kroger. Let us conclude our learning below.
As you can see, Kroger is one of the largest supermarket chains in the United States, and they do have powerful digital campaigns. As digitalization develops, each business should use digital marketing in addition to traditional marketing to attract more customers and make their lives easier by online purchasing methods and offering rewards.
With a huge increase in the service industry. There is a very high competition where marketing plays a crucial role-taking advantage of technology, not merely in this industry in which every other company is focusing on digital marketing to rise ahead of each other. If you too are interested in learning advanced digital marketing strategies, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
We hope this blog on the SWOT analysis of Kroger has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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