The Kroger Superstores!

In the early 1970’s, Kroger was at the proverbial crossroads. The closing years of the sixties and early years of the seventies had brought about many changes in American life - the most obvious, of course, being political and social in nature. Far less obvious, but sweeping nonetheless, were the changes in the retail business environment. The supermarket industry, in particular, was reeling. There were many factors behind this – inflation, wage and price controls, consumer advocacy (for the first time, a real public focus on nutrition and health), food shortages, strikes and a number of other concerns. On top of this, the age-old battle for marketing and competitive supremacy was becoming more heated than ever.

Throughout 1970 and 1971, Kroger conducted an arduous, in-depth review of every aspect of its operation – company structure, management, manufacturing, merchandising, store locations and design, personnel training, you name it. At the same time, they conducted the most in-depth review to date of their competition in every market – an assessment of their strengths and weaknesses and how Kroger was stacking up against them. Since this was the seventies, you might call it an “I’m OK, You’re OK”-type analysis, referring to a famous pop-psychology book that half of the country seemed to be into at the time. (My mom had the book. Of course, I never read it, but I vaguely remember a parody - in Mad Magazine or somewhere else - called “I’m OK, You’re Nuts!”).

Some results of the study were reassuring – Kroger’s balance sheet was strong, and their distribution centers and manufacturing/private label operations were going great guns, as it were. Most importantly, though, the study revealed Kroger’s problem areas –the things that had to be addressed to ensure Kroger’s survival in what would prove to be a very challenging decade for the industry. They could see clearly now –the rain was gone. They could see all obstacles in their way…

And there were two main obstacles to be dealt with. First, it became clear that Kroger would be better off withdrawing from unprofitable markets that showed little potential for a turnaround, those areas in which Kroger was a clear also-ran. These markets were Chicago (most remaining stores sold to Fisher Foods’ Dominick’s division in 1971), Wisconsin (55 stores statewide - including the remaining 19 Milwaukee units, some of which went to Jewel, in 1971), Minneapolis (most stores sold to Quality Foods, also in ‘71) and Birmingham, which Kroger left in 1972. Also, the number of retail divisions, known as “Kroger Marketing Areas”, was consolidated to 13 from the previous 23.

The other major problem was the state of the stores themselves. Averaging only 16,000 square feet in store size, Kroger found itself falling behind industry standards. The number of food items had proliferated wildly in the 15 years or so that Kroger ‘s stores had been that size, and just as significantly, the smaller stores placed severe limitations on the amount of (very profitable) general merchandise items that could be stocked. As a couple of folks have noted in their comments on this site, Kroger’s produce and service departments (deli, bakery, etc.) left something to be desired. Another issue was the relative blandness of the stores. What may have been “state of the art” or at least above par in the late 50’s was by this time sorely dated. Above all, Kroger's stores were in dire need of a distinctive new image.

They really went for it. Out of this painful process came the “Superstore”, a new concept in every way for Kroger, one which made an immediate and fairly long-lasting impact on the chain’s fortunes. Fondly remembered by many today, the superstores easily ranked among the most attractive stores of the era.

Bursting at the seams with pride in their new stores, Kroger described a typical exterior in 1972 as follows – “The new look starts when you’re several blocks away. A graceful white column topped by a room-sized cube bearing Kroger’s name towers 30 feet high to identify the store.” (If you’ve ever stood at the base of one these signs, as I do when I buy gas at a Kroger near us, you’ll notice it definitely is “room-sized”. Surprisingly so. Many of these signs still exist, long after the age of the superstores has passed.)“As you enter the parking lot, the store comes into view. Bigger. Longer. Often with a SupeRx store as an integrated neighbor. A sharply clean, crisp look. Soaring white arches with almost a Moorish look, silhouetted against smoke brick and blue sky.” (I’m assuming the “sky” part varied, but I was pretty young in 1972!)

Inside were the real delights – “Look around. The first impression is spaciousness and cleanliness. Then a warmer, more friendly look. Then it hits you. The colors. Pulsing and alive, accented with wooden beams. Even the cases have lost their pale pastel tones. Now they’re richly-hued green and gold and bittersweet (I always thought that was a kind of memory, not a color), sparked with walnut-vinyl trim. Bold colors transmit a sense of shopping excitement.”

Then there were the service departments – “The Village Bakery is like a transplant from an English Tudor village with its beams and cross-hatched windows. And if the Viennese tortes, gesundheit kuchens (I’d probably love ‘em if I knew what they were!) and buttery dinner rolls look particularly good, there’s a reason. They’re made especially for the Village Bakery in local custom bakeries … and in a growing number of areas, in Kroger’s own handcraft bakeries.” “Next door in the delicatessen, a pleasant-faced clerk proffers a sample of salami and calls attention to the delicatessen’s freshly-barbecued ribs, basted with a tangy sauce and broiled to a tantalizing brownness. She stands under a wood-shingle roof, accented with the golden glow of lighted panels. Her stock in trade is prepared foods ready to carry home…”

There’s not a lot I can add to these great descriptions or to what you can see for yourself in the photos, but I would like to point out the great, classic 70’s lighting fixtures – globe lights with red, yellow or smoke-colored plastic domes, and the wood and textured amber glass-framed globes above the checkstands. The textured amber “glass”’ is probably fiberglass-reinforced plastic, a very popular decorative material of the time.

The size range of the superstores, with some exceptions (see the comments on the previous post), was 25,000 to 42,000 square feet. By the end of 1974, with three years of intense superstore construction under its belt, Kroger had opened 300 new stores and converted 250 existing ones into superstores, with an average square footage per unit of 29,000 as opposed to the 1970 average of 16,000. The “converted” stores, as mentioned, were completely redeveloped existing Kroger stores, expanded and refitted with the superstore interior package. The company tended to go with larger stores in booming new suburban shopping areas, such as the 35,616 square foot superstore opened in late 1971 in Goodlettsville (Nashville), Tennessee, located on Two Mile Pike (later renamed Rivergate Parkway after the adjacent mall of the same name), or in upscale areas, such as the Hyde Park section of Cincinnati, where a 42,000 square foot unit opened in 1974.

Kroger’s aggressive approach for the superstore program was fortuitous. Had Kroger delayed the superstore rollout by even a year, the cost would have been far higher, given the unprecedented inflation of the 1973-75 period.

Just as a side note, as if all of this weren’t exciting enough, Kroger decided to enter the amusement business. As trading stamps fell victim to the price wars of the early 70’s, Kroger needed a means to bolster its Top Value Enterprises subsidiary. In May 1972, Top Value entered into a joint venture with Taft Broadcasting, a Cincinnati-based media empire, to form Family Leisure Centers, Inc. Taft was just about to open Kings Island, a theme park located northwest of Cincinnati off of I-71. The first project of the new joint venture was Kings Dominion, a new theme park to be built in Richmond, Virginia. The first phase of the project, Lion Country Safari, “where the people are caged and the animals roam free”, opened in 1973 with the rest of the park following a bit later. In early 1975, Family Leisure Centers purchased a second theme park, Carowinds, located in Charlotte, North Carolina, from an investor group headed by Duke Power. When Kroger sold Top Value in 1978, it retained its interest in Family Leisure for another couple of years, eventually dissolving the partnership with Taft. Kroger did retain majority ownership in Kings Dominion for a period of time after that.

One other area the company dabbled in at this time was that of convenience stores. “Happy Food Stores” was what they were dubbed, complete with a clown mascot, and an experienced executive from Lil’ General stores to head up the venture. Let’s just say that they didn’t exactly live up to their name.

But the real story for Kroger in the seventies was of course, the superstores, and they certainly did live up to their name. Customers responded positively to Kroger’s new stores, as evidenced by record sales increases from 1972 through 1976. Kroger’s competitive position in their midwest and central markets was strengthened, and huge inroads were made in the newer, booming southern markets.

So, for Kroger and their customers, it was a bright, bright, sunshiny day!

The photos, all Kroger annual report publicity shots, from the top: (1) A photo montage from the Cincinnati Hyde Park location, opened in January 1974 (2) an exterior from 1975, location unknown, (3) the checkout from the Mooresville (south suburban Indianapolis), Indiana store, a 1961 store expanded from 16,000 to 29,000 square feet in 1973 (4) and (5) interiors from 1975, unknown location (6) the produce section, big on celery, Mooresville (7) poultry case, Mooresville (8) a family in front of another poultry case, 1976 (Remember those huge gallon milk cartons? I was sure glad when they started putting handles on those things!) (9) meats, unknown, 1976 (10) the “Village Cheese Shop”, Hyde Park (11) Delicatessen, 1976, unknown (12) a more elaborate cheese/wine section, 1976 (13) a pleasant-faced clerk in the bakery area, 1976 (14) bread section, unknown, 1974 (15) greeting card and gift section, including a line of “famous brands” cards that I actually remember, 1976.

A Tale of Kroger, Old and New

The photographs above depict the Kroger store at the Southland Shopping Center, located on the corner of Westnedge and Milham Avenues in Portage, Michigan. Portage is just south of Kalamazoo, and about 150 miles from Chicago. They were taken by the late John Todd, a Kalamazoo-based commercial photographer who extensively documented the area’s growth over a four decade career.

They date from July 1960, and show the store’s grand opening festivities. As mentioned numerous times on this site, “grand” openings at the time were exactly that. They were true community events, featuring all manner of hullaballoo – dance contests, pony rides, drawings, and of course, giveaways. In this case, as the photos show, the giveaways included dolls for the little girls and an unspecified “Free Baked Good!” for the adults.

The Kroger store appears typical of the era, probably 12,000 – 16,000 square feet in size, with the oft-seen white internally lit letters against a light blue corrugated metal background. The interior shots show the produce area and the prepared foods counter, where one of the chefs (the guy in the party hat) was obviously in the spirit of things.

The Southland Shopping Center featured two Kroger-owned entities, the supermarket and a Top Value Stamps redemption center, located on either side of a Federal Department Store. The Federal stores, 58 of which were in operation in 1961, were owned by Detroit-based Davidson Brothers, Incorporated. They were closed in the 1970’s.

For the next 12 years, this store was Kroger’s standard-bearer in the Portage area. Around 1965 Meijer, a local favorite, opened a “Village Market” store down the street, and would expand it over the years. A modern-day Meijer sits on the same site. In 1972, Jewel-Osco opened a large store in the area (again locating on Westnedge, on what could have easily have been termed “Supermarket Row”), one of a number of stores in Western Michigan cities, which included Benton Harbor and St. Joseph, which that chain would operate.

In February 1973, Kroger rose to the occasion with the opening of a brand-new Superstore (shown in the photos below, which were also taken by Mr. Todd) to replace its original Southland Shopping Center unit. In many cases, Kroger would knock out a wall of an existing store in order to expand the shell for a new superstore. Since the company’s minimum acceptable standard for the superstores was 25,000 square feet (with a maximum size of 42,000 square feet), it was necessary to build a new unit on the end of the shopping center, in this case right next to Kroger’s Top Value redemption center. That year (1973), Kroger created 68 superstores through renovation/expansion of existing stores, while opening 80 new ones. I’m not altogether sure which category this one fits in!

From Kroger’s standpoint, the superstores were revolutionary, facilitating tremendous growth and expansion for Kroger in the newer, rapidly growing Southern markets while shoring up their position in their traditional heartland areas such as Portage.

The 1973 photos appear to be pre-opening shots. Of note are the “Xtra Low Discount Prices” ceiling hangers that can be seen in a couple of them. These were part of a Kroger marketing strategy that appears to have been selectively employed at the time, based on local market conditions. A&P, who also had a store in Portage, was in the midst of its “WEO” campaign, which effectively drained the profits from much of the supermarket industry (and ultimately did very little to help A&P). Also, by this time, grand openings were usually (but thankfully not always) more subdued affairs, heavily focused on price specials and not much else. Nothing against discounts, but I personally still like the idea of a “Free Baked Good!”

The 1960 Kroger location now houses a Barnes and Noble, the 1973 location a Petco and M.C. Sporting Goods. The Federal Department Store is now a JCPenney Home Store.

My sincere thanks to the Portage District Library, and to their resident local historian Steve Rossio, for the use of these photos (and for the accompanying historical background notes) from their John Todd collection.

The SupeRx Files

In the latter years of the 1950’s, Kroger entertained the possibility of operating its own chain of drugstores. Having successfully expanded the company in the postwar era, America’s third largest grocery chain began to consider other avenues to employ their successful merchandising practices, preferably in a way that would complement their existing supermarkets while providing a means to enter new regions. A slow, deliberate process ensued as Kroger sought the ideal entry into the drugstore field.

In late 1960 the right opportunity came, and on November 16, The New York Times announced Kroger’s purchase of Plainfield, New Jersey-based Sav-On Drugs, Inc. (No relation to the west coast Sav-On drug chain.) At the time Sav-On had five stores in New Jersey – Plainfield, Carteret, North Plainfield, Watchung and Springfield and two on Staten Island, New York. All of these stores were well outside of Kroger’s existing market area.

Arguably the major factor in Kroger’s decision was the reputation of Sav-On’s president and founder, James P. Herring. Herring, a 25-year veteran of the drugstore industry at the time, had spent most of his career with the Walgreen Co., where he was a key leader in Walgreen’s successful conversion to self-service in the early 1950’s. In 1954, Herring left Walgreen to start his own company. As head of Kroger’s newly formed “SupeRx” division, Herring’s merchandising and management savvy would more than justify their confidence.

Although only one SupeRx, a Milford, Ohio unit, had been opened by August 1961, plans were unveiled to open 19 more in the following six months. Most of these were slated to be located next door to Kroger stores. In 1962, Kroger entered the drugstore business in Michigan, with the purchase of a single Owl Drug Co. store in Battle Creek. There was a strategic reason for their purchase of the Owl unit, even though four brand new SupeRx’s (Ypsilanti, Mt. Clemens, Saginaw and Plymouth) were stocked up and ready to go. Michigan law at the time mandated that drugstores operating in the state have at least 25% ownership by registered pharmacists, a move designed to protect independent operators against the onslaught of chains. Since Owl had been granted a prior exception to this law, Kroger assumed it would be accorded to them as well. Not so. In September of 1962, the Michigan Board of Pharmacy formally rejected Kroger’s application to operate the SupeRx stores. Not until December 1963, more than a year later, did the impasse end, when the Michigan Supreme Court ruled in Kroger’s favor and the license was granted.

Despite the Michigan debacle, Kroger continued to open SupeRx stores in other markets, and in November 1962, the company acquired the 18-store Gasen’s Drug Stores, Inc., a St. Louis chain. Both Gasen’s and Sav-On would continue to operate under their original names for a few years, while new stores went under the SupeRx banner. At the close of 1962, Kroger had 66 drug stores, and a year later there were nearly double that amount, 119. In addition to the (now 10) Sav-On units in the northeast, there were the 18 Gasen’s units in greater St. Louis and 91 SupeRx stores in the midwest, west and south. Kroger was becoming a national player in the chain drug business.

Throughout the balance of the 1960’s and into the early 1970’s, Kroger’s SupeRx division, as it was formally named in 1969, was an unqualified success. There were 180 stores at the end of 1965, 307 by the end of 1967, 381 in 1969 and 476 at the end of 1972. In 1970, the state-of-the-art SupeRx photo-finishing plant was opened in Cincinnati, bringing this profitable activity in-house in Kroger’s home market. One of the most prominent signs of SupeRx’s success was the ascendancy of division president (and Sav-On founder) James P. Herring to the post of Kroger’s president and chief executive officer in 1970.

When Kroger’s much-heralded Superstore program was launched in the 1970’s, SupeRx stores were a standard part of the package, opening alongside most of the gleaming new superstores, an activity that continued throughout the decade. To coincide with the Superstore openings, heavy emphasis was placed on SupeRx’s decidedly non-pharmaceutical offerings – touting SupeRx as “the place where people go to buy a TV set, a guitar, a grass skirt, a hair dryer or a hank of yarn”, as the company put it in 1972. I hope SupeRx’s buyers didn’t go too heavy into the grass skirts – at least not for the Ohio stores, that is.

With the stress on general merchandise, however, the SupeRx image had begun to blur by the mid 70’s, to the point where the stores “began looking like mini discount stores”, as later stated in Kroger’s 1983 “100th anniversary” pictorial history book. SupeRx’s identity as a pharmacy had receded in the public’s mind, and sales and profits began to slide. A strong effort to re-establish SupeRx’s “drug store” bona fides and sharpen up the marketing focus was undertaken, achieving moderate success.

By the end of the 1970’s SupeRx was back in a buying mode. In 1979, 14 central Florida stores were picked up from Cleveland-based Gray Drug Stores, Inc., bringing SupeRx’s Florida tally to 86 stores out of a companywide total of nearly 500 units. In early 1985, the company made what would be its largest acquisition, winning an intense bidding war with Rite Aid for the prize of Hook Drugs Inc., an Indianapolis concern with 320 drug stores. (SupeRx had 620 units at the time.) Hook had strongly expressed a preference for Kroger’s less intrusive management style over the potentially sweeping changes they anticipated under Rite Aid’s wing. The fact was, by this time, the SupeRx operation was badly in need of an infusion of fresh talent – a stock analyst quoted in the Wall Street Journal sharply put it that the company had “never really put together a focus that the customer has responded to”, and that the key would be to “assimilate the well-run, very profitable Hook operation into a not so well run, marginally profitable SupeRx operation”. Yow.

Indeed, a year and a half later, Kroger made the decision to spin off its SupeRx group. A new company, Hook-SupeRx, was formed to assume 700 of its nearly 900 drugstores, with the balance – mostly stores in Florida (which eventually went to Rite Aid), Alabama and Arizona, put up for sale separately.

Hook-SupeRx would become a public company in 1992, operating stores under the Hook, SupeRx and Brooks banners. (Note: Thanks to Dan for pointing out some additional banners I omitted - SuperXtra Drug World - later just called "Drug World" and Warehouse Drug, formats developed to compete with Phar-Mor and Drug Emporium, two fellow Ohio-based "discount drug warehouse store" chains that experienced rapid growth in the 80's and early 90's and are now both gone. In 1994, Hook-SupeRx operated 19 of these stores, according to an annual report quote provided by an anonymous commenter on this post.) The company struggled, due in large part to the lack of a computerized prescription-trackingsystem that would allow customers to have their orders filled at any of the chain’s stores. Two years later the company was acquired by Twinsburg, Ohio based Revco D.S. Inc., pushing Revco into the number two spot in the nation’s drug store hierarchy, squeaking past Rite Aid but well short of number one Walgreen. The Brooks stores (mostly located in New England) were sold to Jean Coutu, a Canadian firm, which would later merge with Eckerd. Coutu sold the Brooks and Eckerd stores to Rite Aid in 2007.

In 1996, Revco attempted to sell out to Rite Aid, under pressure from its co-chairman and largest investor Sam Zell (of recent Chicago Tribune fame). Because of the heavy degree of overlap between the companies’ market areas, the Federal Trade Commission sued to halt the deal. A year later, Woonsocket, Rhode Island-based CVS Corporation was successful in their attempt to buy Revco, and all stores were converted to the CVS banner.

As far as Kroger is concerned, although the free-standing drug store format has long since gone the way of the dinosaur there, in-store pharmacies (which in many of Kroger's markets would, ironically, use the name "Sav-On") would become, and still are a major part of their business.

The photo above is from 1967, the three below from the following year.

A Very Fashionable Kroger, 1966

These photos, taken in 1966, show the Kroger location at Dover Center and Oviatt Road in Bay Village, Ohio, an affluent suburb of Cleveland. The store had just reopened after a brief closure for remodeling. First is a color shot of the store’s façade, followed by alternating black-and-white and color photos that provide a “before and after” look at the various departments.

The story of Kroger Bay Village involves one of the earlier attempts by a major supermarket chain at molding the “look and feel” of an entire store to fit the preferences of a specific demographic, as opposed to mere promotional displays. The remodeling came about as a result of a joint effort between Kroger, Progressive Grocer magazine, and the Reuben H. Donnelley Corporation, a company best known as a major publisher of Bell System telephone directories. Progressive Grocer was in the midst of its landmark “Consumer Dynamics” study, the main purpose of which was to help supermarkets identify and respond to demographic characteristics of their shoppers. Ultimately a series of categories, based on age, marital status, income levels and ethnicity was arrived at. To make (an extremely) long story short, it was concluded that supermarket chains would be wise to maintain a complete selection across all demographics, yet to tailor each individual location with the predominant local demographic in mind. To borrow an example from another study, while all Kroger stores might maintain a minimum inventory of a particular exotic vegetable on an upper shelf, higher income area stores would carry it in quantity, displaying it more prominently.

Participating in the study, Kroger decided to offer their Cleveland division as a guinea pig, with the intent of deploying the Consumer Dynamics Study recommendations in select stores identified as serving a predominant demographic group. An exhaustive study based on census data and the Donnelley firm’s market research was carried out, and the Cleveland area was segmented into the above-mentioned categories. A high income area store, the Bay Village Kroger, was chosen first.

Ironically, the Bay Village store was not even two years old, having opened in August 1964 (the décor package was essentially the same as the previously featured Dallas NorthPark Kroger). The study research revealed that while Kroger enjoyed a good reputation in the area, residents assumed (correctly) that the local store was typical in every way, with nothing to distinguish it from the average relatively new Kroger. The upshot of this (not stated in the PG article), as nice as the store may have been, was that Kroger was potentially vulnerable in the event an upscale competitor moved into the area.

It was decided that the Bay Village Kroger undergo remodeling, to provide a more upscale, individual look, while maintaining the store’s basic identity as a Kroger. Greenery on the sidewalks, special lighting, carpeting in select areas, an expansion of the dairy, meat and bakery areas and the pièce de résistance – a new International Foods department, were implemented. “Carryout boys” were added, outfitted in sharp light blue blazers with brass buttons and bowties. Additionally, the store was given a distinct identity – it was referred to henceforth in all advertising as “Kroger of Bay Village”.

It worked. Sales were up in all departments, with a 35% overall increase in the first four weeks versus the previous year’s figures. Employees were fired up about the changes – “After being with Kroger for 15 years, I’ve never seen a remodeling that made such an impact on customers. Even the employees seem more cheerful”. Customers approved as well – “Items seem better arranged. Related things are now in the same sections. The International Foods are wonderful, but I doubt I can trust my husband. He’ll leave his whole paycheck there.” (Um, okay...)

Long term, it’s conceivable that this store influenced Kroger on its journey from generally conservative store design to the much more stylish Superstores of the early 70’s. Sadly, Kroger folded its tent in the Northeast Ohio area in 1984, a move still lamented by many.

Top to bottom, the photos show (1) the store exterior, (2, 3) the entrance/checkout area, sporting a new beamed ceiling with recessed lighting and blue/green carpeting (wonder how that stood up to Cleveland area winters?), and the toiletries area in the background with new elegant little lights, (4,5) the bakery area, with frozen bakery items now added (remember, they just taste expensive), (6,7) meats, expanded to add more cold cuts and a very heavy beamed canopy, suspended by chains (King Arthur would have felt at home in this department), and (8,9) produce (more new elegant little lights). Then, of course, is the true Cinderella story - where the nondescript pumpkin of a picnic goods section was transformed into a gleaming coach – the International Foods area (10,11), with a great, outrageous wall treatment, more blue/green carpeting and a chandelier that I find myself seriously digging. Gosh, I could spend my whole paycheck there!

Below are a few additional views – close-ups of the toiletries department, canned goods and baby items areas. Lastly is the “new items” area, a new feature introduced in the remodeling (with a mannequin, no less!). Featured that week were products from Minneapolis-based arch competitors Pillsbury and Betty Crocker, trademarks now long since owned by the same company, General Mills.