Kroger's Fresh Evolution
New stores offer hot prepared food alongside fresh fill-in, with room to grow
Sign of the Times: In the Loaf ‘N Jug division, testing of the fill-in shop concept began at its Fountain, Colo., store. “We’re trying to provide that one-stop shop for the customer who’s looking for a place for that fill-in shop: fresh produce, meat, meal solutions, whether it be hot meal solutions or expanded grocery, expanded frozen,” says Art Stawski, president of Loaf ‘N Jug.
Striking a Balance: The Loaf ‘N Jug team is still learning how to balance the mix of items in the produce section that serve grab-and-go vs. take-home occasions. Fortunately, the team’s association with King Soopers has proven to be a huge advantage. “We’ve been able to use their expertise on product selection,” says Stawski, “but they’ve also helped us with training, merchandising and employees. This isn’t a product selection you can just throw in. It has to be worked.” For example, King Soopers’ produce specialists helped Loaf ‘N Jug create a produce training manual that guides store associates on how to merchandise and maintain the product.
Take It Home: In the rest of the store, the fill-in shop is served with take-home sizes of cookies, snacks and grocery items. Six cooler doors alone are devoted to frozen dinners. The store also has monthly promotions on Kroger private-label grocery items, tied into the seasons, such as a grilling promotion in the summer and a baking promotion during the winter holidays.
Fountain of Youth: “The opportunity with fountain is to get the right number of heads in stores, and we’ll spend a lot of time around that this next year,” says Rod Taylor, director of c-store foodservice for Kroger Convenience. The team will know it has hit the right number, he says, by the store’s overall fountain sales and its customer base, which for this category tilts heavily toward millennials. To this end, it also plans to experiment with new flavors and marketing campaigns, and leverage social media to promote the category. “It’s understanding what best-in-class we have internally, looking at what the competition is putting forth, and what our strategy needs to be going forward,” says Taylor of the effort.
Pizza Please: At the Real Time Café in the Colorado Springs Loaf ‘N Jug, pizza has a big presence, with several pies behind the bar, including a breakfast pizza. However, it’s not an offer fit for every store, says Taylor.
For example, the Colorado Springs site has a large in-store kitchen that provides room for the program and its in-store prep. “We have different models around the pizza program to be able to support store operations,” says Taylor.
A Chester’s Fried Chicken program, breakfast sandwiches, made-to-order subs, cheeseburgers and sides round out the menu. At the Colorado Springs site, chicken tenders are the top-selling foodservice item.
Here too, just as with the fresh program, Loaf ‘N Jug coordinates its foodservice program with King Soopers. “We try to stay in balance with what we’re doing at King Soopers,” which helps to better leverage the relationship, Taylor says.
Rolling Out: Kroger Convenience recently hired a category manager to oversee roller grill for the divisions and examine opportunities that it can take across the banners. This includes a focus on bringing freshness to the category in 2014.
Regardless, don’t expect the retailer to explode its menu. “We want to be about simple, and it’s not going to be about a whole bunch of different varieties,” says Taylor. “And the whole store’s like that. It gets back to that fill-in mentality.”
Getting Fresh: One of the first impressions upon walking into the Colorado Springs Loaf ‘N Jug is an emphasis on freshness. Indeed, the site’s large produce and meats section greets customers as soon as they enter. But it’s an area that is under constant evolution. “We are learning more and more every day what products we need in this section,” says Stawski, who points out that, based on customer feedback, the assortment has changed several times since the site has been open.
For example, the Loaf ‘N Jug site brought in winter squash and pumpkins last fall based on customer requests. For such products, the c-store division leans on its relationship with its local supermarket sister, King Soopers, to optimize its produce assortment.
“We work probably quarterly with King Soopers to look at their top-selling produce items,” says Suzanne Berger, category manager for produce, candy, snacks and ice cream at Loaf ‘N Jug. “We’re pinging against their database and matching ourselves up.”
A recent matchup: Loaf ‘N Jug switched from stocking random-weight, loose carrots to packaged baby carrots after learning that it was a top-selling item at King Soopers. It also introduced bagged russet potatoes, a top seller at King’s, and saw strong sales in the c-store.
Not every supermarket success translates to the fill-in shop occasion, however. For example, the Colorado Springs Loaf ‘N Jug originally stocked a selection of organic fruit—berries, bananas, apples—because it sold so well at King’s. But low sales, high waste and a lack of customer interest convinced the team it wasn’t the right offer for the site.