Kroger's Supply Chain

INTRODUCTION

Hypermarkets are retail outlets that offer everything under one roof. From grocery items to bath and linen items; from liquor to apparel, these stores cater to large array of products for varied customer needs by merging aspects of a supermarket and a departmental store. The items are generally in the product mix of 40% edible and 60% non-edibles, they are able to achieve a net margin of 19%. In India, retail stores that cover an area of more than 50,000 sqft. in size can be classified as hypermarkets.

In 2010, the Indian hypermarket industry was worth thirty seven billion dollars and showed signs of immense growth for the future. Although, the industry has exceptional potential, it is still not able to match the growth predictions

It offered various sections including food and nonfood products such as drug store, photo finishing services and apparel. Fred Mayer is now a part of Kroger which is the biggest grocery retail chain in US. However, the actualization of hypermarkets is tracked down to the establishment of Carrefour in Europe and Thrifty Acres in USA in early 1960s. Few decades later, after various improvisations of hypermarkets format; Tesco emerged in United Kingdom in mid 1970s which is today considered one of the most popular and reliable hypermarkets with its foothold in almost all countries. The largest chain in the world in the current scenario is Wal-Mart followed by European giant Carrefour. In India, the largest hypermarket chain is Big

The hypermarket industry is still new and global financial crisis and its persisting effect has resulted in considerable delays in supply. International industry leaders such as IKEA and Carrefour had shown immense interest to enter and form a foothold in India. However even after FDI was passed in 2012, there have not been many applications that were received. Tesco had shown interest to invest USD 110 m in partnership with Tata group in India which was approved and currently the U.K. based giant is the only one to have entered multi brand retail in India and set up its stores. This lack of applicants and interested parties can be mostly contributed to the norm of FDI subject to state approval. There are a lot of apprehensions looming as the ruling government was against any further FDI in multi brand retail while in opposition. Recently announced rules of FDI have not been changed, there is still a doubt on whether the any new applicants will be approved as Tesco’s application was approved during the ruling of last government. The entry of new international players in the market is not going to be a cakewalk as the rules and regulations attached to the entry are still extremely complicated and not straightforward. The requirements for FDI of 51% are given