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Kroger's New Stripped-Down Grocery Brand Testifies that Value is the New Norm

Posted by Dale Buss on June 17, 2013 06:02 PM

If there's one thing that American CPG brands and retailers have learned over the last three years, it's that there definitely is a new normal when it comes to the attitudes of US consumers about their pocketbooks. The economy may be slowly coming back, but there doesn't appear to be much change in the recession-borne dedication of grocery shoppers to getting the absolute most out of their supermarket dollars.

That's the bottom line being addressed by food-industry brands in various ways these days. Kroger's latest move has been to open a stream of stores, mostly around the Midwest, under a new discount brand called Ruler Foods.

Part of JayC Food Stores, which Kroger purchased in 1999, Ruler Foods now has 18 locations under a test concept for the Cincinnati-based grocery giant, according to the Commercial News in Danville, Ill. Rulers sells Kroger brand food and a limited assortment of other national-brand items.

"We have high hopes for it and we're pleased with the results so far," a Kroger spokesman told the newspaper. "It's too soon to say whether it opens in other markets."

Lest anyone forget about the consequences of not playing the value-shopper card right, there is a new CEO at Procter & Gamble, whose current one could have played the new normal better; the sight of Tesco leaving the US market with its tail between its legs and heading back to the safety of its UK home; and fast-food chain after fast-food chain that has been struggling for months to make sure value consumers are effectively served.

There are other no-frills aspects to Rulers: no pharmacy, and no fuel center. Customers bag their own groceries and "rent" shopping carts for 25 cents, the publication said, which is returned when the cart is replaced. This apparently cuts the number of cart gophers needed for each store. Rulers have all of the typical grocery-store departments, but less selection than most.

"The value shopper is a growing customer segment, one we think is here to stay," the spokesman said. "This concept store is helping us learn how to be relevant to value shoppers and create deep and lasting loyalty."

Comments

Limpeza pós obra Brazil says:

You have to watch the prices

June 18, 2013 05:12 PM #

Sam Kanu United States says:

That's just grim....

June 20, 2013 07:33 AM #

Richard Layman United States says:

The shopping cart and bagging is what Aldi does.  And Kroger is not the only chain experimenting with deep discount banners.  Giant-Eagle did it with ValuKing, although they seem to be backing off that for a newer less deep discount banner called Good Cents.  Food Lion had/has Bottom Dollar.

In weak markets where value matters and you don't want to lose out to Aldi or Sav-A-Lot franchisees, maybe it makes sense to offer a deep discount banner of your own.

But it could be like the full service airlines and their attempts to offer lower cost brand alternatives to fight off Southwest.  It didn't work for anyone.  They still couldn't bring down their cost structure to be co-equal to the discounter.

June 22, 2013 10:00 AM #

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