Kroger is facing a very different problem now. The supermarket giant spent years trying to become bigger through its proposed $24.6bn takeover of Albertsons. That deal collapsed. Now the question is how Kroger becomes more efficient without simply becoming a smaller version of itself.
One of the most interesting developments is happening far away from the supermarket aisles.
Kroger is developing a Global Capability Centre in India, with reports that the company intends to move a range of functions overseas as it looks for significant cost savings. Areas mentioned include merchandising, marketing, supply chain, category management and human resources. One industry report suggested more than 5,700 jobs could eventually be affected, although another source close to the situation said that figure was exaggerated and that Kroger has not finalised the number.
That uncertainty is important.
Kroger is not saying it is simply going to eliminate thousands of American jobs. The bigger story is that the company appears to be looking at where supermarket work should be done in the future.
ISN believes this could become one of the less visible changes taking place inside American grocery retail. The supermarket itself remains very local. The work behind the supermarket is becoming increasingly global.
Kroger also has a new leadership direction and is trying to sharpen pricing, improve productivity and compete more aggressively with Walmart.
There is an obvious question here: if a supermarket can centralise technology, data, merchandising and other corporate functions thousands of miles away, how much of the traditional supermarket headquarters is actually needed?
That may be the real Kroger story.
The company could eventually discover that its biggest transformation after the failed Albertsons merger is not another acquisition. It could be the restructuring of how Kroger itself operates.
