Kroger - Market Entries and Withdrawals - Pittsburgh

Pittsburgh

Kroger had a number of stores in the Western Pennsylvania region, encompassing Pittsburgh and surrounding areas until the early 1980s, when the U.S. began experiencing a severe economic recession. The recession had two significant and related effects on Kroger's operations in the region. First, the highly cyclical manufacturing-based economy of the region declined in greater proportion than the rest of the U.S., which undercut demand for the higher-end products and services offered by Kroger. The second effect of the economic recession was to worsen labor-management relations which led to a protracted labor strike in 1983 and 1984. During the strike, Kroger withdrew all of its stores from the Western Pennsylvania market, including some recently opened "superstores" and "greenhouses". The new superstores in Western Pennsylvania, which included at least the one at North Huntingdon Township (Irwin, PA) and another at Cranberry Township, were Kroger's state-of-the-art facilities. They were equipped with optical (bar-code) check-out scanners that were new to the industry, and especially to the region. In addition to the usual meat/dairy/produce departments, they contained a separate bakery, deli, cheese shop, and seafood counter, amenities that have come to define the modern suburban grocery store. In an innovation that did not define future trends, the new superstores also included extensive non-foods departments that sold among other things, televisions, and other electronics. Hence, the closure of these newly opened, trend-setting facilities represented an abrupt retreat in the region.

Kroger's exit ceded the market to lower-cost, locally owned rivals, most notably Giant Eagle and the Supervalu-supplied Shop 'n Save and FoodLand chains. (Ironically, Kroger bought Eagle Grocery company, whose founders went on to create Giant Eagle.) Kroger still maintains a presence in the nearby Morgantown, West Virginia, Wheeling, West Virginia, and Weirton, West Virginia/Steubenville, Ohio areas where Giant Eagle has a much smaller presence and the Supervalu-supplied stores are virtually nonexistent, though in all of these cases Wal-Mart remains a major competitor and Aldi is the only other supermarket with any market overlap.