Tuesday, November 11, 2008

Barney Kroger - The Cincinnati Kid

The history of Kroger, like that of so many companies born in the same era, is a great American story. The roots of today’s Kroger Company reach back to 1876, when 16-year old Bernard Henry Kroger took a job selling coffee and tea door-to-door for The Great Northern and Pacific Tea Company in his hometown of Cincinnati. Kroger, one of ten children born to German immigrants, worked hard to help support his family, who lived in a flat above a dry goods store the family owned. After two years, Kroger left Great Northern to join the William White Company, another coffee and tea firm, leaving that firm shortly thereafter for the Imperial Tea Company.

When Imperial began to run into trouble, the owners asked young Kroger (who had been working a wagon route up to that point) to manage the company’s store for a 10% cut of the profits, which at the time were virtually nonexistent. Convinced he could turn things around, he took up the challenge. A stickler for quality with more than a bit of starch in his personality, Kroger built a following for the store. Interestingly, as Progressive Grocer noted, “It wasn’t a wealthy clientele. They were wage-earners’ wives who came back to shop, and told their friends…” Having saved up $372 from a year of toil, a considerable sum in 1883, Kroger approached the Imperial Tea owners with an offer to buy a one-third interest in the company. They refused, offering an increased share of the profits instead. Adamant about owning a stake in the game, Barney decided to strike out on his own.

With an additional $350 borrowed from a friend, Kroger opened “The Great Western Tea Company”, a tiny store on Cincinnati’s Pearl Street, replete with fire-engine red paint and gilt lettering, with a horse-drawn wagon sporting the same colors. Through some initial setbacks, including the loss of the horse and wagon in an unfortunate train crossing accident, a flood which destroyed the store’s initial stock, and an attempt by his landlord to increase his store’s rent (forcing Kroger to move to a less attractive location on a side street), Kroger persevered.

Within months, Kroger opened a second store, and by mid-1885 had added two more for a total of four units. By 1893, after ten years on his own, Kroger had 17 stores and was considered one of the most successful businessmen in Cincinnati. In 1902, The Great Western Tea Co. was reincorporated as The Kroger Grocery and Baking Company, which would remain the company’s legal name for the next 40 years. The word “baking” in the company’s name reflected an important aspect of Kroger’s business. At the turn of the century, Kroger made a splash by announcing his plans to set up the company’s own bakery, selling loaves to Kroger customers at half the average going price, then 5 cents each. Not only would this help build business for his stores, but it also would enable Kroger to capture a bigger chunk of his customers’ bread budget, beyond just bulk flour, butter and egg sales. As he acknowledged to a New York Times interviewer in 1901 - “In Cincinnati, with its large percentage of thrifty Germans, bread is usually baked in the home”. At two for a nickel, Kroger projected sales of 25,000 loaves per day to those thrifty folks.

Another innovative step Kroger took was born out of the company’s 1904 acquisition of the Nagel butcher shop chain in Cincinnati. After initially operating the meat markets separately, Kroger made a decision to integrate them into his grocery stores. Over the initial objections of his butchers, who resented the loss of their independence and the new bookkeeping requirements Kroger imposed, these early forerunners of the “complete food market” proved to be a huge success and had a great influence on the chain food store business as a whole.

With a solid base in Cincinnati, Kroger began to expand to other areas, first to nearby Hamilton, Ohio, then to Dayton and Columbus, where the company had 15 and 8 stores respectively by 1910. These initial forays were followed by an expansion drive (which reached a fever pitch by the late 1920’s) to other cities and the smaller towns in between- Detroit, St. Louis, Peoria, Indianapolis, Toledo, Cleveland, Grand Rapids, Youngstown and Charleston (WV), to name some examples. Much of this growth was accomplished through acquisition – 109 Piggly Wiggly and 43 Kohn Stores in the St. Louis and Central Illinois areas, 108 Piggly Wiggly stores in Louisville, 114 Bowers grocery stores in Memphis and the surrounding area, (along with yet more Piggly Wigglys) and Universal Stores of Madison, Wisconsin. In the coming decades, acquisitions would continue to provide a major vehicle for Kroger’s growth.

In late 1926, rumors began to fly that Kroger would merge with Philadelphia-based American Stores Company, possibly in combination with First National Stores or the H.C. Bohack chain. While some talks were held, these plans never came to fruition, and in my opinion would likely have not gone over well in light of the beginnings of a movement against chain store “monopolists” (or more accurately, oligarchs) that would gain sentiment as the 30’s rolled on.

In December 1927, B.H. Kroger sold his stock in the company, staying on as chairman but stepping down as president, turning that responsibility over to William H. Albers. Later on, he would repurchase a huge block of Kroger stock to help bolster confidence in the company through the depression years that followed. In November 1931, with nearly 4,900 stores in operation, he retired altogether. Barney Kroger passed away in July 1938, leaving behind a company that 70 years later is the largest company in America whose mainline business is supermarkets – an admirable legacy.

These photos are undated – the top photo showing a “B.H. Kroger” store circa the dawn of the 20th century. Below is a typical Kroger from the early 30’s, near the end of Mr. Kroger’s tenure with the company.


  1. “In Cincinnati, with its large percentage of thrifty Germans, bread is usually baked in the home”.

    No idea why this makes me giggle but ut does. I bet those people from Imperial Tea Company were kicking themselves when Kroger became uber successful.

  2. Didi - Well, Barney was of German descent and a Cincinnati native, so he would know!:)It sounds quaint (and maybe slightly politically incorrect)today, but really is a testament to America's rich ethnic heritage. I would guess his bosses at Imperial lived to regret their decision.

  3. There were sign of discontnent within Kroger during the 1920's and 30s. Kroger was reluctant to venture into the new concept of self-service supermarkets and Michael Cullen would leave the company to start King Kullen on Long Island, which argueably claims to be the first modern supermarket and Alber's would leave to start Alber's supermarkets in Columbus,OH. Alber's is credit with the first use of the word supermarket.

    King Kullen still survives a regional operator on Long Island. Alber's was acquired by Atlanta-based Colonial Stores and eventually converted to Big Star in the early 70s. By the mid-70s, the Ohio operation was in its death throes.

    The modern Kroger does a poor job of catering to ethnic needs that Barney Kroger used to build the chain. Kroger's overall strategy seems to be target a wide swath of the demographics with a mid-market to moderately upmarket appeal, but it seems to work better than the strategy of its contemporaries in the face of Walmart.

  4. Ken - Kroger seemed to prefer a slower, more methodical approach in some respects and did not adopt self-service and the larger store footprints as quickly as some other chains did.

    As far as catering to ethnic tastes, I guess it must depend on the particular store. Our local Kroger has a pretty wide selction of international foods compared to other stores in the area. My family works with a number of international college students (mostly from Asian and European countries) and we've had good luck finding some of their favorite foods there.

  5. Kroger does have the Buford Hwy/Clairmont Road location in Atlanta that does well with the high Asian and Hispanic population in the corridor, better so than the now defunct Northeast Plaza Publix. Then in Arizona there is the Fry's Mercado, though Im not familiar with the particulars.

  6. Ken - Thanks. I'm sure the selction of ethnic food varies widely among their stores. My aunt and uncle don't live too far from the area you cited. They are offf of LaVista Rd, where there is a large Orthodox Jewish community near them as well.

  7. My God, Kroger's story is worth to be placed among the Grocery and Supermarket pionneers of the 20th Century...

    Just seeing his story makes me remind here in Canada what the Loeb, Loblaw, Sobeys and Steinberg families went through to develop Canada's supermarket legacy !

    Good work !

    (Ghost of Steinberg's)

  8. Ghost of Steinberg's - Without question, Kroger is one of the most important chapters in American supermarket history. Happily, it's a story that's still ongoing!

  9. BH Kroger's great granddaughter, Suzanne Berne, is an accomplished author of several novels, most recently "Missing Lucille", a novel about piecing together the life of a grandmother that she never knew. Lucille Kroger Berne was the third child of Barney H Kroger. The book gives some interesting insight into the life and legacy of the Kroger family and some interesting tidbits about the history of the Kroger enterprise. A wonderful book for anyone who may be interested.