About Kroger Co-The

The Kroger Co. (Kroger) operates as a food and drug retailer. The company operates supermarkets, pharmacies and fuel centers across 35 states while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The company also manufactures and processes food for sale by its supermarkets and online. Stores As of January 28, 2023, the company operated supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of January 28, 2023, the company operated, either directly or through its subsidiaries, supermarkets, of which had pharmacies and fuel centers. Approximately 50% of the company’s supermarkets were operated in company-owned facilities, including some company-owned buildings on leased land. The company’s stores operate under a variety of banners that have strong local ties and brand recognition. The company connects with customers through its expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience. Fuel sales are an important part of the company’s revenue, net earnings and loyalty offering. The company’s fuel strategy is to include a fuel center at each of its supermarket locations when it is feasible and it is expected to be profitable. Each fuel center typically includes 5 to 10 islands of fuel dispensers and storage tanks with capacity for 40,000 to 50,000 gallons of fuel. Supermarkets are generally operated under one of the following formats: combination food and drug stores (combo stores); multi-department stores; marketplace stores; or price impact warehouses. The combo store is the primary food store format. This format is successful because the stores are large enough to offer the specialty departments that customers desire for one-stop shopping, including natural food and organic sections, pharmacies, general merchandise, pet centers and high-quality perishables, such as fresh seafood and organic produce. Multi-department stores are significantly larger in size than combo stores. In addition to the departments offered at a typical combo store, multi-department stores sell a wide selection of general merchandise items, such as apparel, home fashion and furnishings, outdoor living, electronics, automotive products and toys. Marketplace stores are smaller in size than multi-department stores. They offer full-service grocery, pharmacy and health and beauty care departments, as well as an expanded perishable offering and general merchandise area that includes apparel, home goods and toys. Price impact warehouse stores offer a ‘no-frills, low cost’ warehouse format and feature everyday low prices plus promotions for a wide selection of grocery and health and beauty care items. Quality meat, dairy, baked goods and fresh produce items provide strategic differentiation for price impact warehouse stores. The average size of a price impact warehouse store is similar to that of a combo store. Seamless Digital Ecosystem The company offers a convenient shopping experience for its customers regardless of how they choose to shop with it, including Pickup, Delivery and Ship. The company offers Pickup and Harris Teeter ExpressLane — personalized, order online, pick up at the store services — at its supermarkets and provide Delivery, which allows the company to offer digital solutions to substantially all of its customers. The company’s Delivery solutions include orders delivered to customers from retail store locations and customer fulfillment centers powered by Ocado Group plc (Ocado). These channels allow the company to serve customers anything, anytime, and anywhere with zero compromise on selection, convenience, and price. The company also provides relevant customer-facing apps and interfaces that have the features customers want that are also reliable, easy to use and deliver a seamless customer experience across its store and digital channels. Merchandising and Manufacturing The company’s supermarkets, on average, stock over 13,500 private label items. Its Brands products are primarily produced and sold in three ‘tiers’. Private Selection is the company’s main premium quality brand, offering customers culinary foods and ingredients that deliver amazing eating experiences. The Kroger brand, which represents the majority of the company’s private label items, is designed to consistently satisfy and delight customers with quality products that exceed or meet the national brand in taste and efficacy, as well as with unique and differentiated products. Big K, Smart Way and Heritage Farm are some of its value brands, designed to deliver good quality at a very affordable price. In addition to the company’s three tiers, its Brands offers customers a variety of natural and organic products with Simple Truth and Simple Truth Organic. Both Simple Truth and Simple Truth Organic are free from a defined list of artificial ingredients that some customers have told it they do not want in their food, and the Simple Truth Organic products are USDA certified organic. As of January 28, 2023, the company operated 33 food production plants. These plants consisted of 14 dairies, 9 deli or bakery plants, five grocery product plants, two beverage plants, one meat plant and two cheese plants. Seasonality The majority of the company’s revenues are generally not seasonal in nature. However, revenues tend to be higher during the major holidays throughout the year. Additionally, certain significant events, including inclement weather systems, particularly winter storms, tend to affect the company’s sales trends. History The Kroger Co. was founded in 1883. The company incorporated in 1902.