February 12, 2007

Kroger's

One the man behind the brand is...
Bernard Kroger

When he was 13, in the Panic of 1873, Bernard Kroger’s German immigrant father’s Cincinnati dry goods store failed. Young Kroger was forced from school into the working world, securing a position as a drug store clerk. The wages were good but his mother couldn’t abide her son working on Sundays and made him quit.

Unable to find work in Cincinnati Kroger shipped away to a farm 30 miles northeast of town. He worked from 4:30 in the morning until nightfall before returning exhausted to his unheated loft on top of a shed. He soon contracted malaria but couldn’t stop working and surrender his $6 a month. Finally, after nine months with his weight down to 100 pounds, he gave up. Kroger walked the 30 miles back to Cincinnati to save the train fare.

Still ill, he applied the next day for work as a salesman for the great Northern and Pacific Tea Company. The owner was none too eager to take on the gaunt, shriveled figure standing before him. He didn’t look like he would last the week. But Kroger talked his way into a trial. He left with a sample case of sugar, coffee and tea.

Kroger was soon making a steady $7 a week in commission sales, more than he had ever earned. Times were good but he realized that sales were slowly slipping. Kroger investigated and discovered the store owner was cutting back on his quality. Kroger learned the lesson that was to guide him through the rest of his business career: “You can’t fool people on food.”

Now experienced Kroger had no difficulty in finding another sales position.
He landed with the Imperial Tea Company but the owners proved to be inept and Kroger was prepared to move on when he was offered managership of the store. He negotiated complete control and set out to implement his retailing theories: long hours, frugality, and quality for the price.

Eleven months later Kroger had the store operating at a profit but the owners would not meet his terms for continued employment. With no hesitation Kroger and a friend opened their own little store. The Great Western Tea Company greeted its first customer on July 1, 1883. But owning your own business isn’t always what it’s cracked up to be.

Two week later Dan, his delivery horse, was killed and his wagonload of goods smashed in a railroad crossing accident. Then one of Kroger’s brothers died and he had to assume funeral expenses. A month later the Ohio River overflowed and flooded the store. Yet, by year’s end the store was established with not a debt outstanding.

Kroger bought out his partner for $1500 and by 1885 he was stocking four stores. He bought directly from producers and in bulk which allowed him to cut prices. When the country experienced a general business downturn in 1893 he bought more stores. In 1902 when he owned 40 stores and changed the business name to The Kroger Company & Baking Company.

Kroger had become the first grocery store to bake its own bread in 1901.
He was able to sell loaves of bread for 2 1/2¢ a loaf and still make a profit.
Other items Kroger wasn’t looking to make a profit on; he introduced the practice of loss leaders to the industry. When Kroger became the first store to combine groceries and meat he entered a drawn out battle with butchers in the community.

In 1908 Kroger celebrated 25 years in business. His 136 stores, all painted bright red inside and out, were beginning to become known outside the Cincinnati area. Kroger’s grocery business was booming but he was unable to transfer his success to other businesses. A newspaper venture failed and a foray into railroading was equally unsatisfying. At one point a Kroger train collided with a Kroger delivery truck. When he learned of the accident the boss railed, “There is just one spot in the whole United States where one of my damn railroad cars could hit one of my damn trucks and you fellows succeeded in finding it.”

Kroger met more success in banking when he founded the Provident Bank in Cincinnati. But nothing matched his grocery empire. Kroger established a great laboratory staffed with food experts and chemists to scrutinize every food item his stores sold. He had stores in more than 1000 communities in the midwest, thirteen bakeries, three packing plants, a candy factory and plants for roasting coffee and packing tea.

In 1928 Kroger sold his shares in the company for $28 million. His life became one of golf in the morning and cards in the afternoon. When the market crashed he bought much of his stock back but retired from business for good in 1932.
His last six years were devoted to philanthropic interests. When Bernard Kroger died in 1938 he operated 4,844 stores.

2 comments:

Mary Popins said...

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Anonymous said...

I have always called this grocery chain "Kroger's". Was this ever the official name? Your title is Kroger's but it the body it only mentions the store as Kroger.