Article Summary
The article describes the current situation in the grocery market, with a particular focus on the activities of Kroger. In 2015, the company bought Milwaukee-based Roundy’s that had been uncompetitive with other national and local enterprises (Taschler, 2019). With the investment of $350 million in Roundy’s stores, Kroger halted this company’s market share loss. However, according to Kroger’s CEO Rodney McMullen, “standing still in Wisconsin was not an option” (Taschler, 2019, para. 11). He announced the investment of $55 million in an automated fulfillment warehouse in Kenosha County and the building of 20 same facilities across the United States that can assemble online grocery orders in five minutes (Taschler, 2019). However, the other two largest retailers, Amazon and Walmart, joined the competition in the grocery business.
Economic Concept
The article refers to the concept of perfect competition that implies the existence of an extensive number of sellers that offer relatively the same products. According to the author, Amazon and Walmart followed Kroger in the competition in online grocer retailing to achieve supremacy in this new business area (Taschler, 2019). All companies are moving aggressively to adopt innovative technologies to capture customers’ attention. At the same time, the increasing number of the same stores in one area surprise business consultants.
Opinion
First of all, it was curious to know that Wisconsin is a state where the largest retailers of the United States compete in the grocery business. Although McMullen states that “he relishes the competition,” rivals experience substantial tension due to constant efforts to gain more significant market shares. However, from a personal perspective, perfect competition brings considerable benefits to consumers who will be offered high-quality and time-sensitive services in online and physical stores.
Reference
Taschler, J. (2019). Kroger ‘playing some offense’ as fierce competition, technology remake grocery business. Milwaukee Journal Sentinel. Web.