Swot Analysis Of Kroger

In the USA Today article titled “Kroger to buy Harris Teeter chain in $2.4B deal”, it clearly showed that the battle for the next Grocery King has officially begun. Kroger has confirmed their purchase of North Carolina based supermarket, Harris Teeter. As the second largest food retailer, Kroger has acquired Harris Teeter in a $2.4 billion acquisition welcoming over 200 additional stores into the family. Currently Kroger has approximately 2,419 stores in 31 states. A combination of food and drug stores, it owns brand names such as Ralphs, Dillion’s and Food 4 Less. Kroger has been expanding their market base through acquisition as early as 1983. This acquisitions purpose is to launch Kroger into what is now known as the upscale food retailer5.
Although Harris Teeter falls short of Kroger’s market share in the food retail industry, it can bring a lot more for Kroger’s competitive advantage against other big name companies such as, Wal-mart and Costco, who uses discounted prices to attract consumers by offering ‘quality’ food as affordable pricing. This purchase can play a crucial part in restructuring Kroger’s business model. Through this acquisition, Kroger is broadening their consumer market is two ways; geographically and demographically. Harris Teeter helps Kroger add four more states (Washington D.C, Delaware, Maryland and Florida) into their expansion and at the same time introduces ‘high-end’ grocery shop than what Kroger stores were previously offering their customers. Acquisitions gives the buyer access to many benefits that might be more costly or difficult to achieve had they done it themselves. Especially if the acquired company has already created a name for themselves within the market and have retained a number of loyal customer base. This can be efficient for companies to gain access to suppliers and distribution centers and bring down their expenses that can be linked to them such as transportation, storage and inventory turnover. Harris Teeter will also benefit from the high purchase power and lower costs
MyWebGrocer and AmazonFresh are one of the big names that all traditional grocers will need to keep a lookout for. Online orders seem to have an average of $168 in sales compared to $30 of the average in-store purchase1. Information like this is important for the organizations because their management team will need to see how to adapt with the changing culture. The will need to either learn and imitate these competition or to build a sustainable competitive edge that will differentiate themselves from them. It will should be taken into serious consideration for Kroger to enter this market as well since it will compliment well with the deep discounts that Kroger is known