After seven years of continuous growth, Kroger might have met its match. The grocery store giant can flaunt itself as America's new favorite grocery store, but two consecutive quarters of declining sales tell the real story, according to reports from the Associated Press.
Foreign competitors, like the German supermarket chain Aldi, simply have lower prices – like, cheaper-than-Walmart low. And with new homegrown competitors like Amazon trying their hands at the grocery market, Kroger realized something had to change.
The solution? Ridiculously low prices for essentials like eggs and milk. Aldi offers eggs for $1.55. Kroger's response: 77-cent egg deals.
"We're going to react, and not allow our customers to think they have to go somewhere else for the best value for those products," Chief Financial Officer Michael Schlotman said to analysts during a conference call.
Now it's an all-out price battle. Aldi and Lidl came to America after finding tremendous success in other Western European markets, like the U.K. The AP reports that just this week Lidl was selling croissants for 39 cents and chocolate bars for 79 cents, which is honestly nuts. At this rate, once Lidl expands, your dream of living in a house of bread can finally be realized.
Another contributing factor is that technology has changed the way people get their groceries. Convenience is of the upmost importance, and companies like Fresh Direct, Blue Apron, and Amazon are in the process of revolutionizing the food-buying industry.
The only way to fight back, is to cut costs. So Kroger is going all in. Next thing you know, the supermarket chain will be paying you to shop there.
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