Walmart closes in on Krogers traditional turf

Published:

By DAN SEWELL

AP Business Writer

CINCINNATI (AP) With a high school pep band playing and employees clapping, cheering and stomping their feet, Wal-Mart opened its newest Supercenter to dozens of anxiously awaiting customers.

At the same time, the worlds largest retailer squarely threw down the gauntlet to Kroger Co., the nations largest traditional grocer, in its headquarters city and 19th century birthplace.

This is the big dog of Cincinnati, proclaimed manager Larry Greer as he surveyed the sprawling new Forest Park store. After a boisterous round of Give me a W... cheering, he wasnt worried about letting any sleeping dogs lie.

Everybodys aware of it; this is the home of Kroger, Greer said, adding that Wal-Mart considers Kroger a strong competitor. Competition keeps us driving. Let em come after us.

On the same day, newly expanded Wal-Mart stores re-opened as Supercenters in nearby Fairfield Township and in Florence, Ky. At least two more Supercenter openings are planned this summer in the Cincinnati market of southwest Ohio, northern Kentucky and southeast Indiana. Wal-Mart, which opened its first local Supercenter less than two years ago in Fort Wright, Ky., expects to have 20 in the region in another year or two.

Besides expanded offerings that include groceries, the stores usually host restaurants, salons, banks and gas stations. As the Bentonville, Ark.-based company has grown from its rural, small-town roots into metro areas, its improved the look of stores, and expanded stocks of fresh produce and organic foods.

A total of six Supercenters opened May 17 in Ohio alone. The company, which opened the first Supercenter with groceries in 1988, operated 1,980 across the United States by Jan. 31, the end of its fiscal year.

We have a lot of plans for Ohio, regional general manager Jerry Spencer said. The entire state has been fabulous for us.

Carts rolling, shoppers roamed the airy, wide-aisled Forest Park store and its vast displays of electronics such as high-definition TVs and iPods, clothes, housewares and food including organic and ethnic offerings. The store was an immediate hit with some of the suburban female shoppers its meant to attract.

Its nice. Everything is right here where you can see it, said Larissa Coston, 33. I can do everything here.

Having Wal-Mart come into your backyard, or any neighborhood to compete with you, usually isnt good news, said Jack Horst, a grocery analyst for Kurt Salmon Associates, a consulting firm that has studied the impacts of Wal-Mart expansion in other markets. In Dallas, for example, Wal-Marts grocery market share more than quadrupled to 21 percent in five years as it opened 20 Supercenters. The companys supply chain and low costs make it a formidable competitor.

I guess I would feel pretty darn threatened, Horst said of Kroger and other Cincinnati area grocers. What youre seeing is the beginning of what will feel like a carpet-bombing campaign.

Kroger, which has more than half the market share in the Cincinnati area, is pushing ahead with its own expansion.

This division has always been very aggressive and very responsive to customers, said Amy Schulten, Krogers advertising manager for the Cincinnati-Dayton area.

Kroger has announced plans for its first local Marketplace stores in three Cincinnati suburban areas. The companys first Marketplace stores opened in Arizona about six years ago, and there are now two in Columbus, Ohio, and 27 total among Krogers more than 2,500 supermarkets and multidepartment stores nationally.

Its a new concept, and theres been a lot of interest in this for our hometown area, Schulten said of the Marketplace stores.

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