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Kroger's Large-Format Store Expansion

Kroger's Large-Format Store Expansion


CINCINNATI, OH Kroger's large-format store roll-out is heating up. Will this help it compete against the Safeway-Albertsons merger? Grocery retail giant Kroger will have 110 large-format stores by the end of this year, only a fraction of its total 2,640 stores in 34 states, according to Cincinnati.com. According to the report, analysts are predicting that Kroger could build approximately 200 more large stores within a few years. However, Kroger has not made any direct statements specifying its plans. How much bigger are Kroger's large-format stores? According to the report, the company currently operates 11 stores that are over 100,000 square feet. The average size of its stores has been increasing since the company first began. cropped 041714 cropped 041714 Wal-Mart has built more than 3,200 supercenters in the U.S. Recently, the company has expanded its smaller-format stores, called Neighborhood Markets, which are about a quarter the size of typical supercenters. Last year, Walmart opened 122 Neighborhood Markets and only 72 Supercenters. Analysts are saying that Kroger is using a different strategy, emphasizing a broad selection of food with some additional general merchandise, unlike Wal-Mart and Target which are first and foremost general merchandisers. "Yes – Wal-Mart has huge stores, but only 40,000 to 50,000 square feet of that is food, so Kroger has a much bigger, fresher selection and the price is close," said Howard Davidowitz, chairman of New York retail consultant Davidowitz & Associates. Kroger's share price is up more than 33% since this time last year. The hugely successful retailer obviously knows what it's doing. It remains to be seen how many large-format stores will be rolled-out, but so far they seem highly capable of remaining profitable. Kroger
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