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Kroger’s Kelley: We Have Work To Do In Competitive Houston Market

HFFVA luncheon
Houston Fresh Fruit & Vegetable Association Member Luncheon attendees heard from Kroger Houston Division President Joe Kelley.

Expect to see The Kroger Co. Houston Division team members take on more leadership roles outside the company. Other changes are coming, too, including more emphasis on diversified marketing and community engagement in the Houston area.

Joe Kelley, who is president of the division, laid out some of the adjustments Kroger will make as he spoke to members of the Houston Fresh Fruit and Vegetable Association in October. He praised the Kroger team in Houston but acknowledged that in a competitive market, Kroger has to continually improve.

“With the talent we have in the Kroger’s Houston Division, we can and must run great stores, ensuring that the customer shopping experience is full, fresh, friendly and clean. Our stores have to be the best in the market,” Kelley said. “The customers certainly have a tremendous number of choices today, not just here in Houston but across the globe.”

The Houston Division has 109 stores. He set a goal for himself to visit each one of them within his first six months on the job. Kelley, who took over the division in May, said that when he visited stores in Houston before taking on the president’s role, he acknowledged the need to ensure that every Kroger Associate greeted every customer, every time. He expects to see progress in that and several other areas as well.

“We need to grow our top line faster than ever. “We’ve been working hard over the last couple of months to identify areas to continue to grow our market share and we’ll be working a lot harder as we move forward. We already see that we are gaining momentum.”

He also said that the Houston Division team will continue to increase community involvement where Kroger operates stores. For years now, Kroger has been active in the community, but Kelley has challenged division leaders to serve on more than one non-profit board. Kroger also plans to have store managers more involved in their local communities, being part of events that are important to the customers that shop in their stores. The division plans to also look more broadly for ways to support organizations and initiatives that are important to the Houston community at large. Kelley had high praise for Kroger’s Zero Hunger | Zero Waste initiative and its overall goal of reducing hunger as one way that Kroger is working to ensure it plays a critical role in empowering the communities it serves.

“If we’re going to trade in the community, if we’re going to grow our business in the community, we need to be responsible for the community,” Kelley said.

Another goal is to attract talent to the company, “to continue to strengthen who we are, where we are and where we’re going,” he said.

Kelley, a Boston native, also said Kroger should be more involved in other types of marketing, including sports marketing among others.

“Back home in Boston we’ve had a pretty good run for the last 10 years, except for the Red Sox this year,” he said. “Sports teams certainly do resonate here in Houston.”

He used the word “vast” to describe the difference between the Boston and Houston markets. Houston is a “very competitive landscape,” he said, with roughly 400 retail food outlets and more than 20 grocery banners.

“I think it makes everybody step up their game a bit as far as who’s going to run the best grocery stores, who is going to have the best customer experience when you come through the doors,” Kelley said. “We have a great team. I’m thrilled with the team that we have.”

He compared the value proposition to a wheel on a bicycle and its many spokes, with each spoke representing a reason a customer would go to or order from a certain grocery store.

“It might be the most convenient. It might be the cleanest. It might have the cleanest restrooms. It might have the freshest produce. It might have the freshest meat. You may like Mary, who’s the cashier every Monday,” he said. “Everybody defines the value proposition differently. It’s not just about pricing. It’s about everything inside of that wheel. Whoever can have the most spokes and satisfy the most customers—that is how our business will continue to be sustainable. And we have to be serious about it and along with that comes an awful lot of training.”

Kroger is the sixth-largest employer in Houston, with 16,000 associates. The grocery company also is unionized, and Kelley said Kroger has a good relationship with the union.

His experience in Houston has been challenging in some respects. Being from the Northeast, he is used to cold weather and at times several feet of snow. In the Houston area, he said, “apparently you get four, five, six, seven feet of rain here all at once.”

He likely was referring to Tropical Storm Imelda, which in September dropped more than 43 inches of rain in some areas of southeast Texas. The division’s Beaumont store flooded and had to close for a few days. He was grateful that everyone was safe.

“But this weather here in Houston is probably the biggest thing that I have to get used to—110 degrees, 112 degrees in the middle of the summer was quite a difference for me,” he said.

He lauded Houston’s diversity and its growth, but something else has made an impression on him.

“Someone asked me, ‘What do you think of Houston?’ Houston is one of the friendliest places I’ve ever been to and I mean sincerely friendly,” he said. “It’s diverse, which means it’s wonderful, but boy, is it friendly. It’s a friendly place to live. It’s a friendly place to work. We have a great team here in Houston and I’m excited to be here.”

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