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Can Kroger Make Americans Buy Their Groceries more like Europeans?

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Kroger is America’s number one grocer. In the current market, companies like Wal-Mart and Amazon.com are fighting to take share away from Kroger, especially in the rapidly developing online grocery market. Kroger is fighting back by purchasing Ocado, a British online supermarket. In the U.K. 6% of food sales are online. If Kroger can increase Americans’ share of grocery sales online from 2% to 6%, it will be a major victory. According to The WSJ’s Logistics Report:

Supply Chain Strategies

The grocery-delivery business has a new market leader, and the surprise is that it’s not Amazon or Walmart Inc. Kroger Co.’s stake in British online supermarket Ocado changes the competitive landscape for an increasingly lively part of the retail landscape, the WSJ’s Stephen Wilmot writes, and gives the largest grocery chain in the U.S. an edge that will draw a response from its rivals. Americans currently buy just 2% of their food online, typically packaged products with long shelf lives. Perishables delivery is much more developed elsewhere, and roughly 6% of food sales in the U.K. are online. Getting to that share in the U.S. will mean building much more logistics infrastructure—like the 20 new warehouses that will come in the Kroger-Ocado deal. That suggests competition in the grocery business may become more focused on distribution networks than on supermarket aisles.

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Originally posted on Yoursurvivalguy.com.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.