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.

The Original Big K

Well, Big K, we hardly knew ye, and now you’re leaving us again. That’s right, the many Kmart stores which for some not well-explained reason took on the “Big K Mart” identity in the mid-90’s are being restored (thankfully) back to just “Kmart”, with a logo closer to their original 1960’s look, albeit with a single color, red. And a familiar sight to many Kroger shoppers is their age-old “Big K” private label brand, probably best recognized in recent decades on their soft drinks, but we’ll talk about that later.

Aside from these, however, was a Mid-South based chain by the name of Big K, which enjoyed a good deal of success as a regional discount store operation in the late 60’s and early 70’s. Big K was a division of Nashville-based Kuhn Brothers Company, Inc., which was founded as a variety store chain in the teens. The information I’ve been able to find about the Kuhn stores, which unfortunately is minimal, indicates that that they were very much cast in the standard Woolworth/Kresge variety store mold. As such they faced similar problems as those firms did in the fifties –footprints too small to accommodate a growing range of popular consumer goods, rising operating costs of counter service as opposed to self service, and most importantly the decline of downtown business districts with the advent of shopping centers with their vast availability of free parking.

In 1962, that historic year for the discount industry, Kuhn’s launched the first of their Big K discount department stores. Kuhn’s employed a strategy similar to Wal-Mart, opening the Big K stores in small-to-medium sized towns within a four-state market area – in their case Alabama, Kentucky, Tennessee and Georgia. Like Wal-Mart, they avoided the larger markets which were likely to be heavily populated with Kmart stores, as Atlanta most certainly was. Kuhn’s-Big K , as the company was renamed, would eventually adjoin the Wal-Mart market area, but there was very little overlap. The Kuhn family and Sam Walton, who were acquaintances, had chosen (for a time at least) to honor an old unwritten code between regional retailers to stay of each others’ territories. Of course another unwritten code, every bit as popular as the first, was to scrap the previous code and build right in your fellow retailer’s backyard. When Wal-Mart opened a store in Jackson, Tennessee, the heart of Big K-land, The Kuhns retaliated by opening stores in West Helena and Blytheville, Arkansas.

By the end of 1973, the company operated 57 Big K’s and 27 Kuhn’s Variety Stores, and had pushed into eastern Arkansas and Missouri, Wal-Mart’s operating area. The Big K stores carried the standard discount store mix of apparel, sporting goods, hardware, toys, etc., and averaged 45,000 square feet. There were three larger stores (65,000-75,000 square feet) ringing the Nashville area, the company’s home turf. In 1977, Kuhn’s-Big K moved into the South Carolina region with its acquisition of Edwards, Inc., a Charleston-based chain of 33 stores in South Carolina.

Soon after the Edwards purchase, the Kuhn’s - Big K operation spun into decline, losing money and experiencing management turmoil. In 1981, Chain Store Age characterized the company as “a broken chain”, citing increasingly intense competition, the strain from the Edwards acquisition and cost overruns on the company’s fancy new Nashville headquarters complex. The magazine was also critical of the Kuhn family’s management approach. Predictions of Big K’s demise were aflight.

Discussions regarding a possible acquisition by Wal-Mart had begun some months before the Chain Store Age article appeared. Wal-Mart, traditionally committed to internal growth, had only one major acquisition under its belt at the time, having purchased the 21-store Mohr Value chain, an Illinois operation, in 1977. When it became evident that Big K would be forced to sell out, the ideal store sizes (directly in line with Wal-Mart’s at the time), respectable customer base, and most of all the chain’s prime locations in new, adjoining territory made the proposition too powerful to resist. Even so, Wal-Mart’s board of directors was split down the middle over the idea. Sam cast the deciding vote in favor of the buyout, and the deal was done. Incidentally, Wal-Mart’s indecision over the buyout paid another dividend – as they hemmed and hawed over the prospect, the value of Big K’s stock continued to fall. The initial purchase price, according to the Wall Street Journal was $17 million in December 1980. By the following June it was $12.9 million, and by the time of the actual buyout in December 1981, it was $7 million - $2 million less than Kuhn’s -Big K had paid for the Edwards chain four years earlier. Sort of gives a new, unwanted meaning to the word “discount”.

The first photo, location unknown, is from 1973. The second and third photos are from the Dickson, Tennessee store and were taken the following year.

A Mid-50's Inside Look at Sears

A set of interior views typical of larger Sears stores from the mid-1950's. From the end of World War II up to that time, the company opened over 100 stores in new locations and had relocated more than twice that number of existing stores to larger, suburban facilities.

Sears’ sales by this time were more than double that of their arch competitor, Montgomery Ward. Their approach to expansion under the leadership of General Wood was diametrically opposed to the extremely conservative stance of Ward under their nearly 80-year old president Sewell Avery. Avery predicated Ward’s go-slow approach on his firm belief that America faced the strong possibility of another depression in the years following WWII. Obviously, this did not materialize, and Avery’s caution, which had served Ward so well during the 1930’s now held the company back. Avery was finally forced into retirement in 1955, and Ward would impressively ramp up their growth in the very late 50’s and early 60’s, but would continue to be dominated by Sears (in 1958, J.C. Penney would pass Ward as number two, but that’s another story).

Another key edge for Sears in competing with Montgomery Ward was their much broader offering of hard lines – tools, sporting goods, lawn and garden equipment and so on. A major tenet of Sears’ merchandising approach was the belief that they needed to provide items of interest to male shoppers to peruse while their wives shopped. This philosophy would eventually lead to the development of the Ted Williams line of sports and fishing equipment and later the (Sir Edmund) Hillary line of camping gear. Sears also placed a much heavier emphasis on large appliance sales with their Kenmore and Coldspot lines. Sears' Coldspot line, for example, was manufactured by Whirlpool and was America’s largest selling freezer line for many years. Ward was much slower to diversify beyond their traditional soft lines.

Most of the photos are circa 1956, including the great shot of the towel display, showing an array of diamond-pattern towels that would be welcome in many a retro fan’s home, the Silvertone radio and TV display, the quinessential Craftsman tool department and the great boating line-up. Sears’ Elgin brand outboards were made during this time by West Bend manufacturing. The escalator shot, from the Nashville, Tennessee store is from a couple of years earlier. The catalog order counter (a fixture of Sears stores large and small) and the paint department views are slightly more recent.