retail news in context, analysis with attitude

The Palm Beach Post reports that Kroger has paid $15 million for a 74,000-square-foot shopping center in Delray Beach, as well as another $2 million for adjacent property.

If Kroger were to open a store there, it would be the company’s first in Florida (at least since the eighties). It also would be right across the street from a Publix.

The Post provides some context: “In other parts of the country, Kroger and Publix are battling for market share. In Palm Beach County, however, Publix has emerged as the dominant grocer by far, with 75 supermarkets, far ahead of Winn-Dixie, Whole Foods and Trader Joe’s.

“Publix reported sales of $34.6 billion for 2017 and a profit margin of 6.6 percent -- an unusually high figure for a player in the notoriously low-margin grocery business. By contrast, grocery giant Kroger showed $123 billion in revenues but a margin of just 1.6 percent in 2017. Unlike Publix, which has a comfortable lead in its main market, Kroger is waging supermarket wars in parts of the country. Also unlike Publix, Kroger sells gas, a notoriously unprofitable endeavor.”
KC's View:
I have to wonder whether, if indeed Kroger has its eye on Florida, it could actually enter the state using an entirely different construct.

What if they built a unit or two, but mostly focused on building out an e-commerce business there that is able to exist without relying on an enormous fleet of stores. Florida is a place where many residents used to live elsewhere, so many folks there may have a strong familiarity with Kroger. Thanks to its significant data mining capability, Kroger might be able to target those folks with knowledge of what they used to buy … and could try to create a new paradigm for building out a business.

Of course, it isn’t an entirely new paradigm. It is what Amazon has done.

I’m just pondering…