New Kroger aims for Meijer, Wal-Mart

Hundreds of people lined up Wednesday morning outside Kroger's newest Lexington location, a Beaumont Centre superstore that boasts furniture, jewelry, toys and more in the company's bid to lure shoppers away from rivals Wal-Mart and Meijer.

Called the Kroger Marketplace, the 125,000-square-foot store features thousands of items not available at typical Krogers.

"I didn't think that they could possibly fit anything more than was in the other Beaumont Kroger. It was humongous," said Traci Voils, who was among the hordes of early shoppers.

The Kroger Marketplace becomes just the second to open in Kentucky, though the company is working to expand its Richmond Road location to become another. That store, which remains open during the process, should be complete by early July.

The opening comes as the company has seen its market share in Kentucky dip, according to an industry trade publication.

The Shelby Report says Kroger's statewide market share was 34.7 percent in the fourth quarter, down from 37.2 percent two years ago.

The company and its 109 Kentucky stores, according to The Shelby Report, have been surpassed by Wal-Mart's 73 Supercenters, which lead at 37.5 percent.

The new Kroger Marketplaces, of which there are nearly 50 nationwide, won't directly compete against Wal-Mart's Supercenters, though. They're slightly smaller and lack soft goods like clothing.

"But it is a way for them to get extra dollars that might have been going to a Wal-Mart or a Meijer or even a home furnishings store," said Lorrie Griffith, editor of the The Shelby Report. "It's a competitive measure. Grocery chains have slim margins, and they need to look at every way they can get you to spend money."

David Livingston, a supermarket consultant based in Wisconsin, said Kroger's best hope is to compete on measures like product quality.

"No one's been able to touch Wal-Mart on price," he said, noting Kroger's Marketplace concept probably aims more at chains like Meijer.

He said Kroger competes against them by offering enhanced bakeries, delis, better produce and such.

It was the produce that most pleased Sofia Ashfaq, who was among those shoppers at the new store Wednesday morning.

"I can find everything I need from here," said Ashfaq, who said she typically visits Wal-Mart and Meijer.

Kroger began exploring its Marketplace approach after merging in 1999 with supercenter chain Fred Meyer, which was concentrated in the Northwest.

Livingston said Kroger has focused mainly on establishing the Marketplace brand in its core markets.

"It's nice to have a good strong sales base to start out with," he said.

Kroger spokesman Tim McGurk said the company has no plans to convert all its existing store locations.

"This will be just for specific sites," he said. "It requires the right mix of population, the right demographics and the right competitive setting."

Kroger is planning to build a Marketplace in Shelbyville and received approval from planning officials there on Tuesday night, McGurk said. The company still is working to reach a final agreement with the landowner, though. Its only other Kroger Marketplace in Kentucky is in Hebron in Northern Kentucky.

In Lexington, though, work continues on expanding the Richmond Road store from 70,000 square feet to 126,000.

Unlike there, Kroger built from the ground up at Beaumont Centre, where its previous building of 60,000 square feet was unable to be expanded to the required size, McGurk said.

Kroger will continue to own its old building and is seeking to lease it out. "There is some interest from a couple of different organizations," McGurk said.

The company also will own a row of shops under construction next to the Marketplace. Among those stores will be a Kroger Wine and Spirits shop, he said.

The company will continue to operate its gas station at Beaumont Centre.