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Kroger Has $78 Million In Plans For Houston Market

Houston 2013 Market Profile

Last updated on June 13th, 2024 at 12:00 pm

by Terrie Ellerbee/associate editor

Houston rivals Dallas-Fort Worth as the Lone Star State’s top economic powerhouse.

Three times out of the past four years, Houston has been named the No. 1 “Top Metro” in the U.S. for corporate relocations and expansions by Site Selection magazine. In 2012, the greater metro area recorded 325 new or expanded facilities, up from 195 the year before, the Houston Business Journal reports.

Site Selection ranked the Dallas-Fort Worth-Arlington area No. 3 with 224. Houston is No. 1 among Trulia’s Top 10 healthiest housing markets for 2013. Fort Worth is No. 9.

The most recent Manpower Employment Outlook Survey found that 23 percent of companies in the Houston-Sugar Land-Baytown metro area plan to hire more employees between April and June, with just 4 percent expecting to decrease staff, leaving a net 19 percent employment outlook. That is the fifth-best among the 100 largest metro areas in ManpowerGroup’s report.

The Dallas-Fort Worth-Arlington metropolitan statistical area’s net employment outlook is 18 percent.

Dallas did beat Houston in population growth. Dallas-Forth Worth’s metropolitan region grew by approximately 132,000 people from July 2011 to July 2012. The Houston-The Woodlands-Sugar Land metro area added more than 125,000 people in the same time period. But Harris County, which is a large part of the Houston-area metro, grew more than any other county in the U.S., adding 80,000 people, according to the Associated Press.

Kroger to invest $78 million in the Houston market

The Kroger Co. first entered Texas in the 1950s in Houston. Today, it is The Bayou City’s sixth largest employer with more than 14,900 associates. Kroger continues to add retail, management and construction jobs in Houston.

Last year, Kroger’s Southwest Division opened five new stores and eight new fuel centers, remodeled 25 locations and expanded one existing site in the Houston market.

In 2013, the Southwest division will invest $78 million as it continues to improve its offerings for the more than 820,000 households it serves in the metro area.

Construction is under way on a new 123,000-s.f. Marketplace store to be located at the northeast corner of U.S. Hwy. 59 and Northpark Drive in Kingwood. It is scheduled to open in the third quarter.

Kroger also will expand one store and remodel 17 others, and add four new fuel centers while expanding three this year in the Houston market.

The company caters to neighborhood demographics by operating different store formats. Its leading design is the Signature layout, which originated in Kroger’s Southwest Division in 1994. The Southwest Division also operates Fresh Fare (smaller footprint, focus on fresh and prepared foods) stores and Marketplace (larger footprint, focus on grocery products plus home goods, toys and jewelry) locations.

Like all traditional retail grocery companies, Kroger competes not only with other supermarkets, but also mass merchandisers and dollar, drug and convenience stores, which have all added to their “fresh” departments and general food offerings. Amazon.com is another formidable threat.

“The dynamic of the grocery retail market has evolved tremendously since Kroger entered Texas in 1955,” Bill Breetz, president of the Southwest Division, told The Shelby Report. “Technology, trends in customer preferences and the arrival of new retail options, which aren’t always brick and mortar, have shaped today’s competitive grocery world. This year, 2013, marks our company’s 130th anniversary. During this period, we’ve listened to our customers and taken action and evolved to remain strong and progressive amidst competitive forces that aren’t always other grocery retailers.”

Kroger is using digital channels to communicate with its customers to offer promotions and contests, streaming radio, social networks, websites, email and more.

“Kroger recognizes the way customers receive and interact with information is continually changing,” Breetz said. “We recently updated Kroger.com and introduced a new version of our mobile app that now allows customers the options to refill a prescription and check their fuel point balance. Every 90 seconds, a new shopper downloads the Kroger mobile app.”

Kroger’s innovations start with the customer first, Breetz said, referring to both the company’s philosophy as well as its business strategy.

“When customers told us they did not like waiting in long lines to check out, we developed a solution that allows our stores to deliver a faster checkout experience,” Breetz said. “Today, the average wait time to check out is nearly 40 seconds less compared to a year ago.”

Another way the company differentiates itself from the competition is through its corporate brands. Its newest own brands are Simple Truth and Simple Truth Organic. Both are designed to provide shoppers with an uncomplicated and trustworthy solution to eating better. Products in these lines are free of 101 artificial ingredients and preservatives

“Our corporate brands continue to trend positively and grow in popularity with customers,” Breetz said. “Kroger offers 11,000 corporate brand items including food, cleaning supplies, kitchen gadgets, health and beauty care, over-the-counter medications, and office and school supplies. Our corporate brands are categorized into three tiers: Private Selection, Kroger Brand and Kroger Value Brand. All tiers are priced to offer shoppers savings over other premium, national and economy brand names.”

Kroger has credited its Customer 1st strategy with its financial success, particularly since 2008, when the effects of the recession became widespread. That strategy began to evolve in 2002 and focuses on four keys: people, prices, products and shopping experience.

“Customer service is one of our core focus areas and a critical aspect of our business,” Breetz said. “We strive to create an environment in which our employees feel valued and an integral part of each shopper’s experience. We motivate and incentivize our associates to be their best through a company-wide culture and recognition program.”

To enhance the shopper experience in 2013, Kroger is focusing on convenience, value, ethnicity, personalization and age/health & wellness, Breetz said.

When asked about industry-wide concerns, he talked about bag bans. Such a ban just took affect in Austin.

“Plastic bag legislation is a hot topic right now in the retail industry,” Breetz said. “We feel the solution is increased plastic bag recycling, not a usage ban. In 2012, our stores in Southwest recycled over 2.4 million pounds of plastic through associate- and customer-facing initiatives such as Bag-2-Bag.

“We entered a pilot partnership with Coca-Cola in November 2010 to introduce the beverage brand’s first Reimagine Beverage Containers recycling center in the world,” Breetz said. “There are now five units in operation at Kroger locations across the Dallas-Fort Worth market. Since the program’s inception, our shoppers have recycled more than 10 million plastic bottles and aluminum cans.”

Sprouts Farmers Market, Aldi enter Houston market

Houston’s booming population, strong employment outlook, robust housing market and attractive incentives for corporate growth and expansion have made it a magnet for retail grocers. Sprouts Farmers Market and Aldi, for example, will debut in the Houston market this year.

“Dallas and Houston are two of the most competitive cities in the country,” Breetz said. “Both cities continue to see an emergence of new and existing retailers because of their steady population growth and economic strength. We live in a market that favors competition and the strongest thrive. Kroger continues to lead the markets because shoppers know us for service, variety, freshness, good prices, convenience, and a personalized shopping experience.”

Sprouts Farmers Market and Aldi are ready to break into the vibrant Houston market.

Sprouts Farmers Market will make its Houston debut in Katy, where it will open a 25,000-s.f. location on March 27 (after press time) at 23105 Cinco Ranch Blvd.

“We’re pleased with the overwhelming response to the announcement of our first Houston-area store,” said Sprouts President and CEO Doug Sanders. “We would like to thank the residents of Katy and the surrounding communities for the enthusiastic welcome. We’d like everyone to know that Sprouts makes a long-term commitment to each neighborhood where we open a store, one that extends long after the grand opening: To offer our shoppers healthy food options for less.”

Three more locations are opening soon in Houston and Spring Cypress. Arizona-based Sprouts Farmers Market has 23 stores in Texas.

Aldi has announced its first nine Houston locations, all set to open April 11. Locations include:

  • 2228 FM 2920 Rd., Spring
  • 4140 Fairmont Pkwy., Pasadena
  • 2009 South Mason Rd., Katy
  • 2045 North Loop 336, Conroe
  • 5930 Fry Rd., Katy
  • 10402 Hwy. 6 South, Sugar Land
  • 11510 Broadway, Pearland
  • 13340 Tomball Pkwy., Houston
  • 6900 FM 1960 East, Humble

Aldi plans to open a total of 30 stores in the Houston area.

In January, Trader Joe’s opened a new store at 1440 S. Voss Rd. in Houston. Its first store in the market opened in The Woodlands in 2012.

San Antonio-based H-E-B released its official plans in late February for a new store at San Felipe and Fountain View in the Galleria that will replace one of its oldest stores in the Houston area.

H-E-B plans to open several stores this year, including its fourth location in The Woodlands.

Whole Foods Market opened a 37,000-s.f. store in Katy at Texas 99 at Fry Road on Jan. 30 that anchors Grand Lakes Marketplace.

Whole Foods Market plans to open another Houston-area store at BLVD Place, a mixed-use development at San Felipe and Post Oak Boulevard, not far from H-E-B’s planned Galleria location.

About the author

Shelby Team

The Shelby Report delivers complete grocery news and supermarket insights nationwide through the distribution of five monthly regional print and digital editions. Serving the retail food trade since 1967, The Shelby Report is “Region Wise. Nationwide.”

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