Kroger stocks up locally
Chain has $500 million commitment to expand in Houston with more stores as well as its online ordering service
Even with the energy slump clouding Houston’s economy, there’s enough job and residential growth to sustain new grocery stores.
That’s the outlook Kroger is taking as it continues building its presence in the area, positioning itself to reap benefits once economic expansion returns to pre-slump levels, said Bill Breetz, president of the company’s Houston division.
Kroger is in its second year of a three-year, $500 million commitment that in 2016 will add eight stores, remodel 14 others and bring the company’s online grocery ordering service to Houston.
With other sectors such as medical offsetting job losses, the oil industry’s ripple effects aren’t as hard as they were in the 1980s, Breetz said.
Though local growth is at a slower pace, residential development continues to sprout in areas such as the Grand Parkway, which had another segment open earlier this year in Houston’s northern fringe.
“We’d love to have the growth that was there, but we believe it’s going to be just one of those oil dips,” Breetz said. “We’re really bullish on being even better prepared for the next growth of this market.”
When it comes to Houston,
Kroger continues looking at growth areas — mainly suburban — and has “a very active real estate department,” Breetz said.
The company on Wednesday opened its ninth Marketplace store in the Houston area along Garth Road in Baytown. The Marketplace store is the grocer’s larger-concept, 124,000-square-foot “one stop shopping” hub, offering traditional grocery departments but also apparel and toys.
Supermarket growth
The 2016 real estate construction forecast by Wulfe & Co. for the Houston area concluded that supermarkets account for 39 percent of the morethan 4.5 million square feet of new retail space developers plan to build.
Kroger will contribute seven more stores to that total in 2016, with Marketplaces in Clute, Houston, League City and Katy, and new regular-format stores in Katy and New Caney. An additional store is planned in Lake Charles, La., which is included in the Houston division.
The company also continues to look at the different formats that fit into urban environments. For example, some existing stores are being remodeled, including the River Oaks store. The store in the Heights, at 11th Street and North Shepherd Drive, also will be remodeled after doubling in size to 90,000 square feet in 2010.
Breetz said the changes are an example of the company looking at how to tailor its stores to local areas.
That also means adapting to changing consumer trends. The company has expanded its organic food selections and is working on adding its “Cork & Tap” concept — the beer and wine bars already in its Katy Marketplace and Cypress store — to other Krogers inside Loop 610.
Kroger faces formidable competition in Houston’s competitive market from other grocery chains and the rise of delivery services like Amazon Prime Now and Instacart.
This summer, Kroger will bring its “Clicklist” program to select stores in the Houston area. Customers will able to shop and place orders online, then drive to a participating store to pick up their groceries.
“We hope to get 20-plus stores set up with Clicklist this year,” Breetz said.
H-E-B and Wal-Mart
Kroger has been aplayer in the Houston market since 1955. Today the company has 111 stores and 16,000 employees in the Houston division, which includes the Brazosport area, Katy, Bryan-College Station, Huntsville, Beaumont and Lake Charles.
The Houston area’s hot grocery market streak continues. H-E-B opened a new Clear Lake store in February, and at least three others are planned within the year in Magnolia, Kingwood and along the Grand Parkway in Fort Bend County, company officials have said.
Wal-Mart has announced plans for a Supercenter in Spring, a company spokeswoman said. News maller-concept Neighborhood Markets are scheduled to open in this spring in Cypress and this fall in Sugar Land. A Sam’s Club is scheduled to open this fall in New Caney.