BY THE MICHIGAN DAILY
Published June 17, 2001
SOUTHGATE (AP) Michigan shoppers soon will be able to fill their refrigerators and their gas tanks at about a dozen Kroger supermarkets.
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Kroger Co. of Michigan plans to open its first fuel center in the state on Wednesday. The four- to five-pump station at its new Southgate store is the first of at least 12 Kroger fuel centers slated to open this year in Michigan.
The Southgate store, which cost $8 million to $10 million to build, will be the state"s 108th Kroger.
Kroger Co., the largest grocery chain in the country in terms of sales and number of stores, already offers banking and package shipping services. Adding gas services is just a another way to meet customer needs, officials said.
The Cincinnati-based company already has added more than 100 gas centers in Colorado, Ohio, Kansas, Idaho, Oregon, Arizona, Virginia, West Virginia, Tennessee, Mississippi, Kentucky and Indiana. Kroger plans to add up to 400 more fuel centers in the next two years.
"We believe in one-stop shopping for customers," said Jon Flora, president of Kroger Co. of Michigan. "Customers are telling us they want convenience and don"t want to go to three or four places to get things done."
The fuel centers will not have convenience stores.
While Kroger plans to competitively price its gas and offer discounts to members of its customer-loyalty program, Flora said it will not significantly undercut prices in the area.
That"s the concern of Mark Griffin, president of the Michigan Petroleum Association/Michigan Association of Convenience Stores.
"Traditionally, what we"ve seen happen, like with Wal-Mart, they price the product way below market and drive out other businesses," Griffin said. "In the short term, gas may be getting cheaper, but they are destroying competition in the market."
Kroger is pursuing state and local approval for fuel centers in Detroit, Lincoln Park, Sterling Heights, Westland, Ferndale, Richmond, Dearborn and in the Lansing and Flint areas.
It"s a move that mimics the retail and gas combinations at Meijer Inc. and Wal-Mart Stores Inc. as retailers strive to broaden customer base and increase revenues.
Grocers adding gas stations is logical, said Kurt Barnard, president of Barnard"s Retail Trend Report in New Jersey.
"It is essentially a matter of leveraging visits required to the grocery store," he said. "There is a synergy between the two. If you need a tank full of gas, you may as well go and buy groceries. If you need lettuce and tomatoes, you may as well get a tank full of gas."























