Leaked Kroger memo says its brand is failing and teases a major announcement coming next week
AP Images / LM Otero
- Kroger is rebranding, according to an internal memo obtained by Business Insider.
- "Today, customers don't know what to make of the Kroger brand," states the memo, which was circulated internally on Monday. "We're trying to be everything to everyone - saying too many things in a fragmented way. And it shows."
- The nation's largest grocer is overhauling its brand as it faces heightened competition from rivals including Walmart, Amazon-owned Whole Foods, discount grocers Aldi and Lidl, and dollar stores.
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Kroger appears to be gearing up to announce a major branding overhaul, according to an internal memo obtained by Business Insider.
The memo, which was shared internally on Monday, stated that Kroger's "old approaches aren't working" and teased an announcement on Nov. 6 in which "all will be revealed." Kroger is planning to host an investor conference in New York on Nov. 5.
"It's been long proven that strong brands drive business," the memo states. "But today, customers don't know what to make of the Kroger brand. We're trying to be everything to everyone - saying too many things in a fragmented way. And it shows. We're a Fortune #17 company that doesn't break the top 100 in brand value ranking."
The nation's largest traditional grocer appears to be rebranding as it faces heightened competition from rivals including Walmart, Amazon-owned Whole Foods, discount grocers Aldi and Lidl, and dollar stores. Walmart and Whole Foods are rapidly growing their online grocery services, while discount and dollar stores are driving down prices.
Kroger's memo concedes that the company is losing to some of those competitors when it comes to branding.
"Core equities that drive strong grocery brands, including quality, freshness, making life easier and saving money, are now what our competitors are known for," the memo states.
So what's next for Kroger?
The company provided a few details about its new brand, saying it "takes a clear stand that fresh shouldn't just be for some, it should be for all," and that it "has a standout look that is instantly identifiable and ownable and will linger in the hearts and minds of our customers."
Kroger expects the new brand to"drive repeat trips and very firmly solidify our leadership position in the industry," the memo states.
Kroger is the largest traditional grocer in the US with more than 2,700 stores and roughly 450,00 employees.
The company recently executed a store-management restructuring that involved hundreds of firings, demotions, and transfers.
"Like many industries, grocery retail is navigating through disruptive change," a Kroger representative previously told Business Insider, regarding the layoffs. "These are not easy decisions, but we do believe they are necessary to ensure the Kroger family of companies can continue to deliver fresh, affordable food for customers, jobs with good benefits and growth opportunities, and our commitment to ending hunger in our communities."
Kroger made the staffing changes after announcing last month that it wouldn't hit its three-year target of $400 million in incremental operating profit as part of the transformation plan that it calls "Restock Kroger."
At the same time, Kroger announced improvements in other metrics. In the most recent quarter, same-store sales grew 2.2% excluding fuel, compared with a 1.6% gain in the previous year, and digital sales grew 31% year-over-year.
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