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Barney Kroger: Hard work, marketing savvy won shoppers

By Barry M. Horstman, Post staff reporter

Barney Kroger relished his reputation as a fastidious crank, viewing it as a tribute to his belief that anything that pleased him was bound to satisfy his most demanding customer.

It was an image that intimidated food salesmen who grumbled about the obstinate grocer who insisted on tasting before buying. It kept workers hustling so as not to be on the receiving end of a blue-streaked temper that spawned jokes that Kroger's second language was profanity.

And, most important, it was seen by the public as an uncompromising commitment to quality - the cornerstone in a titanic success story that transformed the one-time door-to-door coffee peddler into the founder of the nation's largest supermarket chain.

Although Kroger did not invent the supermarket, his name became synonymous with it through innovations that revolutionized food merchandising in America. Kroger was the first grocer to bake his own bread for customers, the first to combine meat markets and grocery stores under one roof, and pioneered the use of cash registers and newspaper display ads.

Today, one of every 10 food dollars in the nation is spent at a Kroger store - impressive dominance for a company nearly undone in its early days by a dead delivery horse and a flood.

Bernard Henry Kroger was born in January 1860, the fifth of 10 children of German immigrants who ran a dry-goods store on Central Avenue. One of his first toys would be a cigar box that he converted into a model of a grocery store.

The family lived on the second-floor above the store - a relatively comfortable life uprooted when Kroger's father died just as his business was wiped out by the Panic of 1873.

To help support the family, 13-year-old Bernard left school to work in a drugstore - a seven-day-a-week job that his religious mother made him quit because of her objection to working on Sundays. He then worked as a farmhand near Pleasant Plain in Warren County, where he was overworked, poorly paid and contracted malaria. After nine months, the homesick boy finally quit, walking the 35 miles home on a cold December day to save train fare.

For the next two years, he thrived as a door-to-door salesman for the Great Northern and Pacific Tea Co. When his sales of coffee, tea and sugar began dropping, Kroger realized the reason was that the owners were cutting corners on quality while still charging full price. ''This was my first experience with the principle that you can't fool people on food,'' he later recalled.

Several similar selling jobs led him to the Imperial Tea Co., where two partners made him manager in a final bid to save their failing grocery. Within a year, Kroger - who worked from sunup to midnight - turned around the store and demanded to be made a partner.

When the owners refused, the 23-year-old Kroger combined his $372 in savings with $350 borrowed by a friend, B.A. Branagan, to rent and stock a small store of their own at 66 E. Pearl St., near the riverfront.

The Great Western Tea Co. - its 17 feet of frontage painted bright red - opened on July 1, 1883. Catastrophe struck only two weeks later when Branagan tried to beat a train to a crossing with their red-and-gold delivery wagon. The train won the race. Branagan was not injured, but the horse was killed, the wagon destroyed and the loss was $518.

Seven months later, a flood ruined all of the store's stock. But Kroger's fierce determination to succeed helped the company rebound, nearly quadrupling its assets the first year.

Even so, Branagan gladly accepted Kroger's offer to buy his interest for $1,500. Now on his own, Kroger redoubled his efforts, and - never doubting that what worked in one location would succeed in another - owned four stores within a year.

By using the same formula - which he described as ''duplicating and reduplicating ... what works'' - he rapidly expanded his empire, renamed the Kroger Grocery and Baking Co. in 1902. That explanation, however, shortchanges the creativity by which Kroger helped that initial $722 investment grow into a chain that peaked in the late 1920s at 5,575 stores nationwide.

Kroger introduced the low-profit margin to the grocery business, buying trainloads of goods at minimum costs to keep retail prices low. Bringing bakery and meat departments into his stores also altered Americans' shopping habits.

As his business prospered, Kroger found time to help create Provident Bank. In 1933, he saved it from a potentially ruinous run with a theatrically dramatic gesture: converting his holdings into $15 million in cash stacked in tellers' cages to reassure anxious depositors that there was plenty of money. Waving two bundles of $100,000 over his head, Kroger, in a forceful voice, told a crowd gathered in the bank lobby that his money was staying in Provident, but said the bank would stay open late for anyone wanting to withdraw his savings. ''But anyone who draws out his money is a fool,'' Kroger said. By that afternoon, the crisis had passed.

Shortly before the stock market crash of 1929, Kroger - ''B.H.'' to colleagues - sold his interest in the company for $28 million. Whether it was a stroke of financial genius or pure luck, close friends could never agree. But he came through the Depression with his fortune intact, even buying back a third of the company to demonstrate his confidence.

Kroger's charitable contributions were extensive though - by his own wish - often unpublicized. With a single check, he reopened city parks and playgrounds closed for lack of funds. He funded two camps for tubercular children, donated five Bengal tigers to the Cincinnati Zoo and was active in the Charter Committee's efforts to reform city government. During the Depression, after asking a Post reporter to bring any deserving person ''in distress'' to his attention, he donated $6,000 to allow a young doctor to continue research on tuberculosis.

After retiring, Kroger played golf and traveled frequently by private railroad car between homes in Palm Beach and Cape Cod with his second wife; his first wife, the mother of his seven children, died in 1899 of an overdose of ether during a minor operation. In July 1938, Kroger died at age 78.

In his later years, when reflecting on his success, Kroger said: ''In the early days, it never occurred to me that I could ever be wrong.'' Today's size of the chain he started - $43 billion in annual sales, 300,000 employees, 2,200 supermarkets and 800 convenience stores - proves that he wasn't.

Publication date: 06-17-99






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