Virginia Newton of Norwood loads bags of groceries into her car after purchasing them at the Norwood Thriftway on Montgomery Road on the store's final day of business in 2004.
In the last 20 years, America’s two largest grocers have acquired a lock on Greater Cincinnati’s and Northern Kentucky’s food supply. Kroger and Walmart control more than two-thirds of local sales.
It hasn’t always been like this. At the start of the millennium, Kroger and Walmart had less than half the region’s market share and Cincinnati had a robust group of regional competitors: Thriftway, Bigg’s and Remke Markets. Today, only Remke remains and has been acquired and downsized by a slightly larger company, Fresh Encounter Inc. of Findlay, Ohio, which operates about 100 stores in Ohio, Indiana and Kentucky.
“I can’t tell you how many people I’ve met on the street who say ‘Oh my God, I wish you still had that store,’” Bill Remke, 78, the retired president of his namesake chain, told The Enquirer.
The fading of Greater Cincinnati’s regional competitors embodies the fears of some antitrust advocates who are worried about Kroger’s proposed $25 billion takeover of Boise, Idaho-based rival Albertsons – one of the largest retail mergers ever pitched to regulators. They fear the same demise of competition may occur in other regional markets, such as Denver, Houston, Los Angeles, Phoenix and Seattle.
But many skeptics remain. Selling off dozens of stores to a smaller local competitor is still an uneven fight and won’t ensure adequate competition, they say.
“It’s much harder for regional players to operate in dominated markets,” Jones said. “The dominant retailers can exploit that position … their (profit) margins are sometimes double what we see in more competitive markets.”
Jones noted Cincinnati isn't alone in seeing giant chains take over. In 1997, only 20% of Americans bought their groceries from the four biggest operators. These days, the four largest chains rake in 70% of those sales.
That shift comes as the grocery store format itself is declining: America currently has about 62,000 total supermarket locations (chain-owned and mom-and-pop alike), a 9.5% drop with 6,500 disappearing in the last 20 years, according to the U.S. Census Bureau.
Local shoppers cope with higher prices at the grocery checkout
Like a lot of shoppers, 26-year-old Claire Uematsu is sick of higher prices at the supermarket amid widespread national inflation since 2021. A graduate student at Miami University, she and her roommates economize by using digital coupons, eating all leftovers, buying generics and cooking at home.
“The different prices are just crazy right now,” Uematsu, of Milford, said.
Shoppers' worries are why the Kroger-Albertsons deal deserves scrutiny, some antitrust experts say. If consumers are feeling pain now, then removing competition might be a bad idea.
"This is why antitrust matters: If you have an increase in market concentration (fewer players controlling a larger share of the marketplace), it doesn't guarantee higher prices − but it sure makes it more risky," said Christine Bartholomew, a law professor at the University at Buffalo.
Still, tons of local shoppers stick with Kroger: In an unscientific November online poll of nearly 1,800 Enquirer readers, 90% said they did most of their shopping at the hometown retailer.
Readers who commented gave the grocer good marks for its product assortment, rewards like gas points and prices. But many more readers commented proximity drove their decision: “It’s closest to my house,” “(it’s the) only grocery store in town” and “there is no other option.”
‘The waterbed effect’: Will Kroger’s Albertsons takeover hurt smaller competitors?
Before the Senate, Needler warned lawmakers of the "waterbed effect" major retailers can have on the national supply chain and smaller, independent grocers.
“We are not afraid to compete ... What we oppose is the lack of constraints on buyer power which thwarts our ability to compete,” he told lawmakers. What mom-and-pop store owners fear most is big chains demanding such low prices from wholesalers that those suppliers would be forced to make up lost profits from them, the small operators.
That’s the waterbed effect: Pressure on suppliers leads to pressure on small competitors.
Needler, who took over Remke Markets in 2017, said he’s been forced to close half of the local chain’s 10 stores to stay in business.
“It’s a good brand, the customers are great, but some of the real estate wasn’t,” Needler said. “We’re going to continue to fight.”
Kroger has pledged the merger will lower prices for consumers, won’t close stores and cut jobs for front-line workers.
"Years ago, families made one weekly grocery trip,” Kroger CEO Rodney McMullen wrote in an editorial this year. “(Today, they) fulfill their food cravings almost anywhere − from dollar and convenience stores to independent grocers, to larger retailers and on e-commerce platforms.”
Former Remke owner reflects on four generations for a family business and a turbulent new millennium
Bill Remke, who now lives in Covington, Kentucky, misses the business. A third-generation grocer, he spent 60 years in the industry. He started bagging groceries at 12. Remke named his son, Matthew, president in 2011 and became his son's No. 2.
“My son and I just enjoyed the business – he was a natural,” Remke said.
Remke said Cincinnati was always competitive. But in 2004, Walmart turned the heat up by building in Fort Wright, Kentucky, the first of what are now 17 Cincinnati-area supercenters within the I-275 Loop.
Bigg’s and Grand Rapids, Michigan-based Meijer stores sold general merchandise (clothing, hardware, etc.) with low-priced groceries to drive traffic. But then Walmart used the same strategy. Also in 2004, Thriftway closed, having struggled since Jacksonville, Florida-based Winn-Dixie acquired it in 1995.
“I was sad to see Thriftway go because they were a fantastic operator,” Remke said. “Walmart had a big impact, especially on the larger format stores, like Meijer and Bigg’s.”
A Thriftway in Green Township in 1998.
Amid the turmoil, Remke Markets bought one of the old Thriftway stores in 2004. Then, in 2010, it acquired Bigg’s.
The buyer is New Hampshire-based C&S Wholesale Grocers, a grocery supplier for 7,500 supermarkets. The company also controls the Piggly Wiggly brand name, which it licenses and franchises to independent operators of 500 Piggly Wiggly stores nationwide.
C&S Wholesale officials said the company owns and operates 11 Grand Union stores in New York and Vermont and 12 Piggly Wigglys in the Midwest and Southeast.
"The overwhelming majority of C&S revenue comes from its wholesale business, with retail making up a small minority," wrote John Marshall, a financial analyst with UFCW Locals 3000 and 324. "In the past C&S has acquired stores only to sell some of them off to other retailers after saddling them with supply agreements."
Could Kroger's secret to success jeopardize the merger?
A key strategy that Kroger has used so effectively to thrive in the past two decades – maximizing market share in local markets – will likely draw scrutiny from regulators.
In the 1990s and 2000s, Walmart’s rapid expansion and low prices pressured supermarkets.
Other chains struggled, but a survival strategy emerged at Kroger. Then-CEO Joseph Pichler described it by telling an old joke about two campers running from a grizzly bear: One of the fleeing campers tells the other he doesn’t have to outrun the bear, just his companion. The implication was Kroger’s goal was to beat everyone besides Walmart.
Over the next two decades, Kroger grew by cutting its prices low enough to neutralize Walmart’s low-cost offerings while appealing to customers’ tastes with a broader selection and better-staffed stores that were smaller, easier to navigate and closer to shoppers' homes.
Since 2003, Kroger's market share in Cincinnati grew from 35% to 47% as Walmart's (including Sam's Club) grew from 10% to 24%, according to Chain Store Guide.
Market share was critical. It’s cheaper to operate stores clustered in fewer markets than sprinkled in several.
A larger portion of a local market also creates greater pricing power (the ability to charge more). In recent years, Kroger has expanded into new states, but mainly it focused on being the No. 1 or No. 2 grocer in markets where it already operated.
“The higher our market share, the higher our ROIC (return on invested capital). You gain tremendous efficiencies,” Kroger CEO McMullen told Wall Street analysts in a 2016 conference. “This is really a major focus point.”
New competition joins the region - but from outside
In the Enquirer's survey, Cincinnati shoppers welcomed recent news that Germany's Aldi and Florida-based Publix have opened or plan to open new stores in the region, expanding their grocery options.
While more players will challenge Kroger and Walmart dominance, the region has still lost something with fewer home-grown retailers.
Andrea Remke recalls her husband's final months, noting his dedication to the family business. He kept going into work, even when it became difficult to speak and his weight had dropped to 115 pounds.
"Next to his family, his wife and kids – he loved that business. He loved the people at Remke," she said. "During the recession in 2009 ... Matthew didn’t take a salary or bonus that year in order to keep on and pay some of his best managers.
"They fought a very good fight for decades in the face of bigger competition," she added. "Our son (who was 10 when his dad died) might have become a fifth-generation grocer for Remke Markets ... that he never did or never would get the chance at the opportunity to, that really stings."
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