Originally Posted by
rasheed
Great question. So, we are still seeing this added Kroger group as a careful addition, still avoiding brands that probably sell higher margin items like Frys or Ralphs. I can speculate that many of these stores don't get as much sales from items such as alcohol due to local laws or traditions.
There is also very heavy competition from other legacy regional brands such as Supervalu or Albertsons and Aldi's West expansion.
I see people pointing out that these retailers will just pocket the savings in interchange fee. I get that thought, but I have personally seen Kroger slash prices on many items. Perhaps it is due to Aldi competition, but there is no doubt that prices on many common grocery items have both sale and store brand prices that I can't see other retailers able to touch. This includes the organic category too.
So, still low risk to Kroger, but definitely hitting areas where grocery price is likely more sensitive. I think Kroger will be easily able to show lower prices if pushed.
Kroger has been increasing prices like crazy in Smiths the past couple months. 20%+ increases all over the store on pet foods, canned goods, etc. Perhaps they will drop the prices back to the "before" levels once they cut off Visa next month. They used to be within 5-10% of WinCo's prices. Not anymore. I get better deals now at Raleys who has never been known as even remotely a price operator.