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Kroger announces retirement of Bill Breetz, names three new division presidents

The Kroger Co. announced the retirement of Houston division President Bill Breetz and the promotion of Marlene Stewart to succeed him. Stewart currently serves as president of the company’s Dillons division.

Colleen Juergensen, who currently serves as vice president of merchandising of the Smith’s division, will succeed Stewart as president of Dillons.krolog

Kroger also announced the promotion of Pam Matthews to serve as president of the company’s QFC division. Matthews currently serves as vice president of operations for Kroger’s Delta division. She succeeds Dennis Gibson, who was recently named president of the King Soopers/City Market division.

“Kroger has an exceptionally strong team of leaders who are fueling our growth and improving our connection with customers,” Rodney McMullen, Kroger’s chairman and chief executive officer, said in a press release. “Marlene, Colleen and Pam bring unmatched depth and experience to their new roles. They will help Kroger continue to make a difference for our customers, associates, and communities — and by doing so create value for our shareholders.”

“Bill’s extraordinary career demonstrates a passion for people and a passion for results. He leads by caring deeply about associates and developing future leaders,” said McMullen. “Bill’s leadership has contributed to Kroger’s success and growth. The entire Kroger family thanks Bill for his many contributions over the years and wishes he and his family all the best in retirement.”

Breetz began his Kroger career in 1972 as a bagger in Louisville, KY. After earning a degree at the University of Louisville in 1977, he joined the management training program and was named a co-manager in Cincinnati. He served in several leadership positions through the years, including store and district management and vice president of merchandising for the company’s Cincinnati/Dayton division. In 2000, Breetz was promoted to executive vice president of Kroger’s Southwest division with responsibility for operations in Dallas. In 2001, he assumed responsibility for operations in Houston as well. He was named president of the Southwest division in 2002, and president of the Houston division in 2015.

Breetz has been active in a variety of community organizations throughout his career, most recently supporting the Houston Food Bank, the Greater Houston Partnership, the Boy Scouts of America, the Muscular Dystrophy Association and other local charities. Breetz and his wife, Jo Ann, have three children and three grandchildren.

Stewart started her career with Kroger in 1977 as a bagger in the company’s Cincinnati division, where she worked full-time while attending the University of Cincinnati. She went on to serve in many leadership roles in Cincinnati, including store and district management, training and merchandising. In 2005, Stewart was named director of operations for Kroger’s Mid-Atlantic division before being named vice president of operations in 2007. She was named vice president of merchandising in the company’s QFC division in 2011. She was named to her current role in 2015.

Juergensen began her Kroger career with the Dillons division in 1981. She served in various leadership roles of increasing responsibility including store manager, zone manager and director of advertising. In 2008, she was promoted to Dillons vice president of operations. She was named vice president of operations of Smith’s in 2012, and to her current role in 2015.

Matthews began her career with the company’s Fred Meyer division, based in Portland, OR, in 1980. Throughout her 25-year career with Fred Meyer, she held a variety of leadership roles in store management, corporate brand development and merchandising. Matthews also served as director of deli/bakery merchandising and director of floral merchandising and procurement at Kroger’s general offices in Cincinnati before being promoted to vice president of merchandising for the Central division in 2006. She was named vice president of merchandising for the Delta Division in 2014 and to her current role in 2015.

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Kroger chairman to retire, successor named

David B. Dillon, who led The Kroger Co. leadership team’s development of the company’s successful Customer 1st Strategy, will retire as chairman of the board Dec. 31, after 38 years of service. Rodney McMullen, Kroger’s chief executive officer, will take on the additional post of chairman commencing Jan. 1, 2015. McMullen has served on the board of directors since 2003. Additionally, Nora A. Aufreiter has been elected to the company’s board of directors.

Dillon served as Kroger’s chairman from 2004-14 and as CEO 2003-13. Prior to that, he held a variety of executive positions at Kroger and Dillons Cos., which merged in 1983. During his tenure as CEO, Kroger grew revenue by $ 45 billion, created 53,000 new jobs, reduced costs for eight consecutive years and returned $ 9.2 billion to shareholders through share repurchases and dividends, which were reinstated in 2006.

As part of the Customer 1st Strategy, Dillon and McMullen, who was then serving as vice chairman, created and executed a long-term price investment strategy that has enabled Kroger to deliver sustainable business growth and shareholder returns, while also saving customers nearly $ 3 billion annually through lower prices. This laid the foundation for Kroger’s growth plan, announced in October 2012, which expands the Customer 1st Strategy by accelerating growth in Kroger’s core business and improving the company’s connection with all customers; expanding Kroger’s presence in new and existing markets; and innovating to create unique competitive positioning for today and the future.

Kroger has also become a leader in supermarket sustainability under Dillon’s leadership, the company stated in a press release. The company has reduced energy consumption in stores by 35 percent since 2000 and reduced its carbon footprint by 4.4 percent since 2006. More than half of the company’s 37 manufacturing facilities are zero waste. Kroger’s efforts to feed families struggling with hunger have grown to total contributions of 250 million meals — 4 million meals per week — in 2013.

“For Dave, Customer 1st — which truly put our customers at the center of how Kroger runs its business — was more than a successful business strategy,” McMullen said in the press release. “It was a philosophy that he believed and lived through his actions every day, and as a result he inspired thousands of our associates during his many years of service to Kroger and Dillons Companies. He understood that Kroger’s greatest asset is the trust that our customers, associates and shareholders have in our company. We are all the beneficiaries of Dave’s extraordinary leadership.”

Aufreiter, director emeritus of global management consulting firm McKinsey & Co., was elected to serve until Kroger’s annual meeting of shareholders in June 2015. At that time, she will stand for election by the shareholders.

“We are delighted to welcome Nora to Kroger,” Dillon said in a press release. “With her broad business experience and consumer and digital expertise, Nora will be a great addition to Kroger’s board.”

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Kroger grows profits, market share in Q3

Kroger cranked out a 21% increase in profit in the third quarter ending Nov. 8 compared with the same period last year. Net earnings for the quarter were $ 362 million, and identical store sales were excluding fuel were up 5.6%.

In a call with analysts, CEO Rodney McMullen said this was the 44th quarter with positive identical store sales. 

Kroger reported $ 25 billion in total sales for the third quarter, an 11.2% increase from the same quarter last year. Private label brand performance stayed steady, bringing in 25.8% of sales during the quarter and 27.3% of sales volume.

“Clearly our rebranded opening price point and Kroger banner brands are a hit with customers. Simple Truth and Simple Truth Organic continue to earn double-digit unit and sales growth,” said president and COO Mike Ellis, referring to the company’s natural and organic lines.

Harris Teeter, acquired earlier this year, is performing as expected, according to a company official, who noted that Kroger made price investments at the banner.

Looking toward the future, Kroger predicts that the identical store sales will grow within a range of 5% and 6% next quarter. For the 2015 fiscal year, if fuel prices rise, Kroger is projecting an 8% to 11% increase in profit.


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Ellis called attention to “customer first innovation” at Kroger’s dairy processing plant in Denver, which kicked off milk production in August. The plant, Ellis said, uses new technologies to keep milk fresher, longer, and package “long-shelf-life products.”

“We are the first dairy in the U.S. to deploy robotic technology that enables us to pack cases and pick and palletize orders entirely by automation,” he said.

At the end of the Thursday call with investors, McMullen wished David Dillon well in the future as he steps down as chairman of the board. Dillon led Kroger for 11 years as CEO.

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Kroger Makes Progress Towards Zero Waste

CINCINNATI — Kroger here committed to moving retail locations toward “zero waste” and sourcing 100% certified sustainable palm oil as it published its seventh annual sustainability report.

Kroger said it is moving toward the Environmental Protection Agency’s zero waste threshold of 90% in all Kroger retail locations. To get there, Kroger will increase the diversion rate to 65% for all stores by the end of 2013, and to 70% by the end of 2015. Today, the company diverts 58% of waste.

The company is also committed to sourcing 100% certified sustainable palm oil by the end of 2015.  Kroger is working with supplier partners to transition out of unsustainable palm oil, as part of an effort prevent the loss of critical habitats, and support the protection of high conservation value forests.

“For 130 years, Kroger has aimed to serve each individual customer, every day, and to be good stewards of our communities and the environment,” said David Dillon, Kroger’s chairman and chief executive officer, in a statement. “Our sustainability progress today is part of this proud heritage, thanks to more than 343,000 associates who are helping make each community we serve a better place to live.”

In other announcements in the report:

  • Kroger worked with more than 80 local food banks in 2012 to donate the equivalent of 200 million meals.
  • Through energy reduction, the implementation of a refrigerant management plan and improved fleet productivity, Kroger reported a 4.8%  drop in overall carbon footprint, despite growing in size and sales.
  • Since 2000, Kroger has reduced overall energy consumption in stores by 32.7%, saving more than 2.48 billion kilowatt-hourskWh—enough electricity to power every single family home in Columbus, Ohio, for one year.
  • Kroger has increased its fleet efficiency by 33.1% since 2008 and is on track to meet their goal of improved fleet efficiency by 40% by 2014.  The company’s store delivery fleet includes 2,700 tractors and 10,000 trailers and makes almost 5,400 deliveries every day.
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W.Va. workers OK new deal with Kroger

Workers at Kroger stores in West Virginia, Ohio and Kentucky have voted to ratify a new contract.

Members of United Food & Commercial Workers Local 400 said the three-year deal preserves health and retirement security and increases wages.


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“This contract is an improvement,” Local 400 president Mark P. Federic said. “Our members will keep their current health care benefits, with no increase in weekly premiums, and won’t be forced onto the often inferior plans offered through the ACA’s health care exchanges. Kroger will pay their share of benefits in full through the life of the contract, our members’ pensions will be properly funded, and our members will all see pay increases.”

The new agreement takes effect retroactively as of Oct. 15. It expires on Oct. 7, 2017, and covers 4,000 workers.

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How being too late and selling too little will help Kroger win, again

Sell to you? I hardly even know you.

In so many words, that’s been Kroger’s posture when it comes to e-commerce. While the Cincinnati-based grocery giant has spent a decade separating itself from peers with leading strategies around supermarket basics like loyalty, pricing and service, it was a seeming laggard in the e-commerce world: Beyond a rarely-discussed Internet shopping experiment in Denver and off-and-on flirtations with partners like Peapod over the years, it seemed as though Kroger was content winning sales in the physical world and leaving the digital battlefield to the more intrepid.

Turns out that was the plan all along.

While Kroger still isn’t doing a whole lot of sales on the Internet, the foundation upon which it could build sales might surprise you.

“Maybe we were unconventional a bit in our thinking on this, but rather than focusing on e-commerce as the core of a digital strategy, we really thought it was critical to first establish what we call a digital relationship with our customers,” Kevin Dougherty, Kroger’s group vice president of digital, said in a presentation at Kroger’s analyst meeting this week. “And that is a basic concept that we thought would, over time, enable us to have millions of unique communications with each of our customers.”

These communications cover things like shopping lists, recommendations and presentations of weekly store specials reflecting a customer’s shopping habits as determined by loyalty data. Because these things have proven value for shoppers in the real world, Kroger reasons, customers are more willing to accept them in the virtual world. And Kroger doesn’t come off quite as desperate as some of its e-retailing peers.

“In a day when most of the email that is sent by retailers is typically ignored and usually quickly deleted, we really … are focused on making each of these touch points more relevant,” explained Matt Thompson, director of digital and ecommerce for Kroger. As a result, Thompson said, response rates to Kroger’s virtual offers are three to five times greater than industry averages.


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As Kroger finally turns its attention to digital sales — with eyes on expanding both the Express Lane click-and-collect model it reeled in with Harris Teeter, as well as newly acquired vitamin and supplement e-tailer Vitacost — Doughtery says Kroger has “a late arriver advantage.”

“We get to lever the investments and learnings of lots and lots of other people,” he said. “And we’ve gone to school pretty heavily in the last several years on this regard.”

Your move, Internet.

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Kroger executives tout growth in own brand

From remaking private brands with more “personality,” to burgeoning digital and natural/organic strategies, Kroger’s “to-do” list is longer than its “accomplished” list, officials of the retailer said. “That’s the thing that’s so exciting for us,” CEO Rodney McMullen said in an address to financial analysts and investors late last month in Cincinnati. “The things that we are working on are getting better, and the …

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Kroger executives tout growth in own brand

From remaking private brands with more “personality,” to burgeoning digital and natural/organic strategies, Kroger’s “to-do” list is longer than its “accomplished” list, officials of the retailer said. “That’s the thing that’s so exciting for us,” CEO Rodney McMullen said in an address to financial analysts and investors late last month in Cincinnati. “The things that we are working on are getting better, and the …

Why Subscribe To SN Digital Access?

Digital Access gives you unlimited online access to our most premium news and analysis such as Kroger executives tout growth in own brand. This includes in-depth stories and insights from our team of editors and guest writers as well as free eNewsletters, blogs, real-time polls, archives and more. In addition you will also receive a complimentary copy of SN’s salary survey sent to you by email.

Click here to read the FAQ page if you have any questions (opens in a new window)

Attention Paid Print Subscribers:  While you have already been granted free access to SN we ask that you register now. We promise it will only take a few minutes! Or visit your profile and add your print magazine account number and zip code.

Already registered? here.

Supermarket News

Kroger executives tout growth in own brand

From remaking private brands with more “personality,” to burgeoning digital and natural/organic strategies, Kroger’s “to-do” list is longer than its “accomplished” list, officials of the retailer said. “That’s the thing that’s so exciting for us,” CEO Rodney McMullen said in an address to financial analysts and investors late last month in Cincinnati. “The things that we are working on are getting better, and the …

Why Subscribe To SN Digital Access?

Digital Access gives you unlimited online access to our most premium news and analysis such as Kroger executives tout growth in own brand. This includes in-depth stories and insights from our team of editors and guest writers as well as free eNewsletters, blogs, real-time polls, archives and more. In addition you will also receive a complimentary copy of SN’s salary survey sent to you by email.

Click here to read the FAQ page if you have any questions (opens in a new window)

Attention Paid Print Subscribers:  While you have already been granted free access to SN we ask that you register now. We promise it will only take a few minutes! Or visit your profile and add your print magazine account number and zip code.

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Kroger: Answering call for simplicity helping win natural share

Kroger’s share of natural and organic foods is growing faster than the category nationwide, company officials said Wednesday, citing responsiveness to changing consumer tastes and an expanding selection.

Kroger supermarkets stock some 17,000 to 20,000 natural and organic SKUs (of 70,000 overall) today.  As the category has gone “mainstream” Kroger has been changing shelf tags so as to point out product attributes like GMO Free and USDA Organic that are helping to drive the growth, Jill McIntosh, VP of natural foods for Kroger, said in a presentation at the retailer’s investor conference in Cincinnati, Wednesday. 

“It used to be that people looked at the nutritional panel to see if a product was good for them,” McIntosh said. “Now, more and more, consumers are looking at the ingredient list to see if its short, simple and actually inludes things they can pronounce before they want to eat it. This is a food revolution driven by the millennial customer.”

Mike Donnelly, SVP of merchandising for Kroger, said customer data indicates that two of every five households buys natural foods today. And though their level of engagement varies, “through insight we can see that journey, and that gives us the opportunity to take targeted offers and really refine them to those customers’ needs as they go forward.”


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Customers, Donnelly added, “believe they can manage their health through proper nutrition, and that has a lot of ramifications at the shelf.” This is particularly evident in Kroger’s natural and organic private brand, Simple Truth, which is riding customer demand for ingredient simplicity  to explosive growth, Donnelly said.

Gil Phipps, Kroger’s VP of corporate brands, in a separate presentation said the brand had growth by 30.7% in unit sales through the first half of the fiscal year behind 97 new items. He said the brand is on-track to reach $ 1 billion in sales this year, less than two years from its founding.

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Kroger cited for work with disabled

Kroger Co. said it has been named Employer of the Year by the Ohio Governor’s Council on People with Disabilities for contributing significantly to employment opportunities for individuals with disabilities.

“We have a long tradition of hiring people with disabilities, especially on our front lines serving customers,” said Keith Dailey, Kroger’s director of corporate communications.

Cincinnati-based Kroger was also recognized earlier this year by the Marriott Foundation for People with Disabilities for helping young people with disabilities transition from high school to the workforce.

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Gallery: New Kroger, Delhaize America executives and other trending stories

Video: Analyst foresees some Walmart ‘cannibalization’

BB&T Capital’s Andrew Wolf, in this video shot during SN’s 2014 Analysts Roundtable, says it’s “too soon to say” how Walmart’s new focus on its Neighborhood Markets will affect the performance of its Supercenters, but he does expect some “cannibalization” to occur. He also discusses Whole Food Market’s move toward more competitive prices, and its increased competition from Mariano’s, Sprouts and others, plus convention retailers with greater emphasis on natural/organic.

See the full video

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Kroger in ‘test and learn’ mode on click-and-collect

Kroger Co. plans to continue to “test and learn” about the click-and collect system in its Cincinnati division before ultimately expanding it divison- and later chain-wide, the company told SN Thursday.

The Cincinnati-based chain introduced a pilot click-and-collect system at a single store in the division earlier this week, designed only for employees at this point.

Kroger has no specific date in mind for expanding the test beyond the pilot store, Keith Dailey, the chain’s director of external communication, told SN, “but we have internal milestones toward which we will be working. As with other new technologies and systems we’ve looked at, we intend to test and learn.”

Citing its QueVision checkstand program as an example, Dailey said Kroger started testing it several years ago at one or two stores, cleared up some kinks, got suggestions from associates, improved the system and then rolled it out to an entire division and ultimately chainwide — the same approach it will take with click-and-collect, he said.

Click-and-collect is a grocery pickup system Harris Teeter developed and Kroger began studying when it acquired the chain last January — a system in which consumers place orders online and pick up their orders at a store.

In an email that Kroger shared with SN, Rachael Betzler, communications director for the Cincinnati division, said, “We are now in the embryonic stages of a click-and-collect test at one of our local stores — so early, in fact, that we just started testing with our associates at [the store].


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“The pilot is not yet customer-facing. Our approach with new technologies and systems is to test small and work out the kinks before scaling more widely, so we’re starting very small with our associates at the Liberty Township store, then we’ll open the location to customers, and once we are successfully implementing the program in one store, we’ll expand to other stores in Cincinnati and eventually on to other divisions as well.”

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Kroger in ‘test and learn’ mode on click-and-collect

Kroger Co. plans to continue to “test and learn” about the click-and collect system in its Cincinnati division before ultimately expanding it divison- and later chain-wide, the company told SN Thursday.

The Cincinnati-based chain introduced a pilot click-and-collect system at a single store in the division earlier this week, designed only for employees at this point.

Kroger has no specific date in mind for expanding the test beyond the pilot store, Keith Dailey, the chain’s director of external communication, told SN, “but we have internal milestones toward which we will be working. As with other new technologies and systems we’ve looked at, we intend to test and learn.”

Citing its QueVision checkstand program as an example, Dailey said Kroger started testing it several years ago at one or two stores, cleared up some kinks, got suggestions from associates, improved the system and then rolled it out to an entire division and ultimately chainwide — the same approach it will take with click-and-collect, he said.

Click-and-collect is a grocery pickup system Harris Teeter developed and Kroger began studying when it acquired the chain last January — a system in which consumers place orders online and pick up their orders at a store.

In an email that Kroger shared with SN, Rachael Betzler, communications director for the Cincinnati division, said, “We are now in the embryonic stages of a click-and-collect test at one of our local stores — so early, in fact, that we just started testing with our associates at [the store].


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“The pilot is not yet customer-facing. Our approach with new technologies and systems is to test small and work out the kinks before scaling more widely, so we’re starting very small with our associates at the Liberty Township store, then we’ll open the location to customers, and once we are successfully implementing the program in one store, we’ll expand to other stores in Cincinnati and eventually on to other divisions as well.”

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Big stores still work for Kroger

While Target announced plans earlier this month for a 12,000-square-foot store, Kroger Co. is still seeing traction with its 120,000-square-foot locations.

“We’ve had good success with our Marketplace format. It is driving a lot of our sales and growth right now,” said Kroger CEO Rodney McMullen in an earnings call on Thursday. Still, Kroger is open to new smaller format possibilities.

The company has been doing research and planning around smaller formats, and carefully observing dollar store chains. McMullen pointed out that Kroger has already been in the smaller format business with its Dillons Food Stores banner.

“And, we think it will be important over time to have even a smaller store that’s part of the profile that’s probably a convenient store, not necessarily a convenience store. But it’s something we continue to work on. We haven’t figured out how to make money the way we’d like to make money there, but we haven’t given up either.”

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Big stores still work for Kroger

While Target announced plans earlier this month for a 12,000-square-foot store, Kroger Co. is still seeing traction with its 120,000-square-foot locations.

“We’ve had good success with our Marketplace format. It is driving a lot of our sales and growth right now,” said Kroger CEO Rodney McMullen in an earnings call on Thursday. Still, Kroger is open to new smaller format possibilities.

The company has been doing research and planning around smaller formats, and carefully observing dollar store chains. McMullen pointed out that Kroger has already been in the smaller format business with its Dillons Food Stores banner.

“And, we think it will be important over time to have even a smaller store that’s part of the profile that’s probably a convenient store, not necessarily a convenience store. But it’s something we continue to work on. We haven’t figured out how to make money the way we’d like to make money there, but we haven’t given up either.”

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Kroger reports 9.4% earnings increase in Q2

Kroger Co. posted another quarter of solid earnings on Thursday.

The retailer reported net earnings of $ 347 million for the second fiscal quarter that ended Aug. 16 — an increase of 9.4% from the same period a year ago. Total sales for the quarter were $ 25.3 billion.

Identical store sales for the quarter, excluding fuel, were up 4.8%. Kroger raised its expectations for this identical store sales growth for the fiscal year to a range of 3.5% and 4.25%. It previously said it expected 3% to 4% comp growth for the year.

“While many of its competitors cut back full-year guidance on the back of poor Q1 results, Kroger actually raised its outlook for the year,” said Kelly Tackett, U.S. research director at Planet Retail, in a media statement.

“To say that we expect more of the same from the leading U.S. grocer in Q2 doesn’t in itself seem newsworthy, but given the headwinds facing all grocery retailers, a 43rd consecutive gain in comparable store sales is in fact quite remarkable.”

Kroger’s private label brands were strong performers through the quarter, with 26.3% of total units sold and 25.2% of dollar sales coming from store brands, not counting fuel and pharamacy

The retailer’s Simple Truth natural and organic brand is expected to bring in $ 1 billion in sales by the year’s end.

Company officials were optimistic about future integration with Vitacost, the online retailer fully acquired by Kroger last month.


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“Vitacost’s people and extensive e-commerce platform coupled with Kroger’s customer insights and loyal customer base will really be a powerful combination that we can leverage to create new levels of personalization and convenience for our customers,” said Michael L. Ellis, Kroger president and COO.

“We intend to build on Vitacost’s robust technology platform and integrate it with our existing digital footprint to do just that.”

Kroger CEO Rodney McMullen said that the Harris Teeter merger continues to progress well.

Harris Teeter will roll out new stores as a quicker pace than in the past, according to Kroger CFO Michael Schlotman.

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Former Kroger exec Claude Allen Moldenhauer dies at 76

Claude Allen Moldenhauer, a 38-year veteran of the Kroger Co. who rose to vice president of produce and floral before retiring in 1999, died Sept. 6. He was 76.Moldenhauer

Mr. Moldenhauer, a resident of Greensboro, GA, earned a bachelor’s degree from the University of Minnesota and a master’s degree from the University of Toledo. Following his long career at Kroger, he remained active in his community serving on the University of Georgia Agriculture Board, as president of the Reynolds Plantation Men’s Club, and as public relations manager for Greene County Habitat for Humanity.  

Mr. Moldenhauer is survived by his wife, Diane Moldenhauer; daughters Julie M. King of Charlotte, NC, and Lynda S. Hawk (Jeff) of Loveland, OH; a son, Jeff Moldenhauer of Maineville, OH; a sister, Wanda Templin; as well as seven grandchildren, four nieces, a nephew, and his beloved dog, Betsy.

A Memorial Service is scheduled for Sept. 10 at the First United Methodist Church in Greensboro, GA. There will also be a celebration of life gathering in Loveland, OH. Donations in memory of Claude Moldenhauer can be made to Greene County Habitat for Humanity, 1373 Willow Run Road, Greensboro, GA 30642 or The Alzheimer’s Association.

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