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By Burt P. Flickinger III, managing Director, Strategic Resource Group
Editor's Note: An interesting past year has given rise to some subtle yet significant changes on the latest edition of Progressive Grocer’s annual Super 50 ranking of the top grocery retailers. With this in mind, PG enlisted retail food industry expert Burt P. Flickinger III, managing director of Strategic Resource Group, to share candid observations and in-depth insights about select retail newsmakers on the annual retail leaderboard. His assessment of nine retailers – which are segmented into four parts and which draws on his personal and professional opinions and years of research, as well as from archival data contained in the 10th anniversary of PG’s Super 50 in 1975 – appears in a new PG online exclusive feature, The Flickinger Files.
The Kroger Co. – ranked No. 2 on PG's Super 50
Kroger is the best managed and led publicly held retailer (KR) in the Americas. The dynamic team of Rodney McMullen and David Dillon have developed the best depth and range of leadership in the food industry from corporate to each of its operating companies and units. From Mike Ellis, president and COO, to Marnette Perry in strategy to tremendous executives at corporate and each operating company. Even after the tragic, premature passing, of the late, great EVP of buying and merchandising, Don Becker, and the recent retirements of five outstanding division presidents, Kroger executives have developed strong successors. Accordingly, Kroger’s leadership has demonstrated itself to be the best in food, convenience and combo store retailing.
Every year Kroger attracts new consumers with it operational excellence surpassing other retailers in serving shoppers through unexpected ice and snow storms in the special weather situations in the Sunbelt to raising shoppers standards of living with lower prices, high quality, and better own brands and fresh foods.
While the Walton family failed at Dot's Deep Discount Drug and Bud's Closeout stores and –after copying Price Costco from Sol and Bob Price – Walmart's Sam's Clubs failed abysmally and were run out of Canada by Costco, Kroger wins in every area of multi format retailing.
Fred Meyer is a powerhouse in food, discount, Rx, jewelry, et al.; Kroger's Food 4 Less is a strong “price impact” retailer with significant innovations in California; Kroger's convenience and gas chains are the "unsung heroes" of chain retail; and Kroger's food and drug stores can win regionally and nationally vs. dozens of U.S. competitors ranging from Albertsons to Walmart.
Kroger's humble, understated brilliance is evident in everything from operational excellence to strategic planning, acquisitions, and the U.S. addition of dunnhumby's operations. Further, its significant cap-ex investments in new stores, renovations, and remodels has helped deliver profitable sales growth and outstanding returns for individuals and institutional investors.
Like Wegmans in the Northeast, Kroger is annually “converting” 100,000+ new college students, who enjoy “Kroger-ing” in Sunbelt and Central U.S. stores far more than their prior supermarket shopping in their hometowns, which did not have Krogers.
Kroger's stock price has appreciated approximately 350 percent the last 15 years compared to Walmart's 15 year stock appreciation of only 9.7 percent in total. This makes Kroger one of the top performing companies, as detailed in Professor Jim Collin's seminal work starting with Good to Great, while WMT is one of the worst performing major non-financial company stocks in the Dow Jones.
With the collective exceptional leadership of Dave Dillon, Rodney McMullen, and Mike Ellis, Kroger has its best leadership team in decades and the best overall executive group in all of retail along with Home Depot’s Frank Blake, Craig Menear, Carol Tome, and outstanding Board member, Helena Foulkes (CVS) and co-founders Bernie Marcus, Ken Langone, and Arthur Blank with their friendly, helpful insights.