Mergers

Kroger's last big merger was in 1999 when it merged with Fred Meyer Inc.  Acquisitions have played a key role in Kroger’s growth over the years. In 1983, 100 years after the company’s founding, Kroger merged with Dillon Companies Inc. in Kansas to become a coast-to-coast operator of food, drug and convenience stores. The biggest merger in Kroger’s history came in 1999, when the company teamed up with Fred Meyer, Inc. in a $13 billion deal that created a supermarket chain with the broadest geographic coverage and widest variety of formats in the food retailing industry. The merger also enabled Kroger to generate huge economies of scale in purchasing, manufacturing, information systems and logistics. In an era when many larger mergers failed, the success of the Kroger-Fred Meyer merger stands out.

http://www.thekrogerco.com/corpnews/corpnewsinfo_history.htm

Fred Meyer's buying relationships capabilities allowed Kroger to try some products that were too expensive for Kroger to buy and sell on its own.  Fred Meyers supplier relations and manufacturing systems have provided Kroger with an advantage of being able to offer more products and a better price than before the merger.  Industry authorities believed that Kroger's merger with Fred Meyer was a necessity to compete against Wal-Mart, Meijer, and the Costco wholesale buying club.

The most significant benefits of Kroger's merger with Fred Meyer won't be visible to the average shopper. The changes involved cost savings that made Kroger leaner and a more efficient profit generator on Wall Street.  Half of the cost savings came from purchasing power - a $43 billion company can make larger orders at better prices than a $28 billion company.

http://www.enquirer.com/editions/1999/12/05/fin_new_stuff_at_kroger.html