Kroger and Tom Thumb: A Detailed Look at Two Grocery Giants

Introduction

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When it comes to grocery shopping in the United States, two names that often come up are Kroger and Tom Thumb. Kroger is the largest supermarket chain in the country, with over 2,700 stores across 35 states. Tom Thumb, on the other hand, is a well-known convenience store chain with a strong presence in the southern states, particularly Texas.

Many shoppers may wonder about the relationship between these two retail giants. Specifically, there is often confusion about whether Kroger currently owns Tom Thumb. In this comprehensive article, we‘ll explore the history of both companies, their current ownership structure, and what the future may hold for each brand.

As a retail and consumer expert and a picky shopper myself, I‘ll also provide some unique perspectives and insights along the way. So let‘s dive in!

The History of Kroger

Kroger was founded in 1883 by Bernard Kroger in Cincinnati, Ohio. From its humble beginnings as a single grocery store, Kroger has grown to become a true behemoth in the industry. Here are some key milestones in the company‘s history:

  • 1902: Kroger becomes the first grocery chain to establish its own bakery.
  • 1916: Kroger opens its first self-service grocery store, revolutionizing the shopping experience.
  • 1929: Kroger becomes the first grocery chain to issue a money-back guarantee on its products.
  • 1960s-1980s: Kroger expands rapidly through acquisitions, including Henke & Pillot, Market Basket, and Dillon Companies.
  • 1999: Kroger acquires Fred Meyer, making it the largest grocery retailer in the US.
  • 2015: Kroger launches its "Restock Kroger" initiative, investing in e-commerce, technology, and private label brands.

Today, Kroger operates over 2,700 stores across the US under various banners, including Kroger, Ralph‘s, King Soopers, and Harris Teeter. In 2020, the company reported sales of $132.5 billion and employed over 465,000 associates.

The History of Tom Thumb

Tom Thumb was founded in 1948 by J.R. Bost and Bob Cullum in Dallas, Texas. The chain quickly gained popularity for its convenient locations, extended hours, and wide selection of products. Here are some highlights from Tom Thumb‘s history:

  • 1956: Tom Thumb opens its first 24-hour store, which was a novel concept at the time.
  • 1963: Tom Thumb is acquired by Ideal Supermarkets, Inc.
  • 1966: Ideal Supermarkets merges with Piggly Wiggly to form Allied Supermarkets, Inc.
  • 1975: Allied Supermarkets is acquired by American General Corporation.
  • 1989: American General Corporation sells Tom Thumb to GrandMet USA.
  • 1992: GrandMet USA merges Tom Thumb with Randall‘s Food Markets.
  • 1999: Randall‘s Food Markets (including Tom Thumb) is acquired by Safeway Inc.
  • 2015: Safeway Inc. is acquired by Albertsons Companies.

At its peak, Tom Thumb operated over 100 stores across Texas and the southern US. The chain was known for its high-quality produce, extensive deli selection, and friendly customer service.

The EG Group Acquisition

In 2018, Kroger made a surprising announcement: it would be selling its convenience store business, including Tom Thumb, to the UK-based EG Group for $2.15 billion. This move was part of Kroger‘s strategy to focus on its core grocery business and divest itself of non-core assets.

The sale included 762 convenience stores across 18 states, operating under various brands such as Tom Thumb, Turkey Hill, Kwik Shop, and Loaf ‘N Jug. For Kroger, the sale represented an opportunity to simplify its business and free up capital for investments in e-commerce, technology, and store remodels.

For EG Group, the acquisition was a major expansion of its US presence. Founded in 2001 by brothers Zuber and Mohsin Issa, EG Group has grown rapidly through acquisitions to become a major international retailer with over 6,000 sites across Europe, Australia, and the US.

In the US, EG Group now operates over 1,700 stores across 31 states, making it one of the largest convenience store operators in the country. The company‘s other US brands include Cumberland Farms, Fastrac, Certified Oil, and Minit Mart.

Similarities and Differences

Despite their different ownership structures and store formats, Kroger and Tom Thumb do share some similarities. Both offer a wide range of grocery products, including fresh produce, meat, dairy, bakery items, and household essentials. Both also have loyalty programs (Kroger Plus and Rewards with Albertsons) that offer personalized deals and discounts to shoppers.

However, there are also some notable differences between the two chains. Kroger operates primarily as a traditional grocery store, with an average store size of around 60,000 square feet. Tom Thumb, on the other hand, is a convenience store chain with an average store size of around 2,500 square feet.

This difference in store format translates to different shopping experiences and product offerings. Kroger stores typically have a much wider selection of products across all categories, including specialty items like organic produce, international foods, and gourmet cheeses. Tom Thumb stores, in contrast, prioritize convenience and speed, with a more limited selection focused on grab-and-go items like snacks, drinks, and prepared foods.

Another key difference is pricing. As a large national chain with significant buying power, Kroger is often able to offer lower prices than smaller regional chains like Tom Thumb. However, convenience stores like Tom Thumb often charge higher prices for the convenience factor, particularly on items like single-serve drinks and snacks.

The Future of Tom Thumb

In February 2023, EG Group announced plans to rebrand all of its Tom Thumb stores to the Cumberland Farms banner over the next 18 to 24 months. Cumberland Farms is another convenience store chain owned by EG Group, with a strong presence in the northeastern United States.

The decision to rebrand Tom Thumb reflects EG Group‘s strategy to create a more unified and consistent brand experience across its US store network. According to George Fournier, President of EG America:

"The Cumberland Farms brand strongly resonates with consumers across the Northeast and Florida, and we are excited to extend that brand to our vast network of stores across the country. This transition brings all of EG Group‘s convenience stores in the United States under a single, unified brand, allowing us to create a consistent and recognizable experience for our guests."

For Tom Thumb shoppers, the rebranding means that their local store will likely undergo some changes in the coming months, including new signage, product offerings, and promotions. However, the core convenience store experience is expected to remain largely the same.

It‘s worth noting that the rebranding of Tom Thumb is part of a broader trend of consolidation and brand streamlining in the convenience store industry. As larger players like EG Group and 7-Eleven continue to acquire smaller regional chains, we can expect to see more unified brand experiences and fewer independent operators in the market.

Kroger‘s Continued Dominance

While the sale of its convenience store business (including Tom Thumb) was a significant move for Kroger, it hasn‘t slowed down the company‘s growth and dominance in the grocery industry. In fact, Kroger has continued to post strong sales and earnings growth in recent years, driven by a combination of organic growth and strategic investments.

In 2020, Kroger‘s sales increased by 8.4% to $132.5 billion, driven in large part by the COVID-19 pandemic and the resulting surge in demand for groceries. The company also saw significant growth in its digital business, with online sales increasing by 116% year-over-year.

To further strengthen its competitive position, Kroger has been investing heavily in e-commerce, technology, and private label brands. Some notable initiatives include:

  • A partnership with Ocado, a British online grocery retailer, to build a network of highly automated customer fulfillment centers across the US. These facilities use advanced robotics and AI to quickly pick and pack online orders for delivery or pickup.
  • The expansion of Kroger Precision Marketing, the company‘s data-driven advertising platform that helps brands reach shoppers with personalized offers and content.
  • The growth of Kroger‘s private label business, which now accounts for over 30% of total sales. Kroger‘s private label brands, such as Simple Truth and Private Selection, offer high-quality products at competitive prices and help differentiate the company from its competitors.
  • The launch of new store formats and services, such as Kroger Delivery Now (a partnership with Instacart for 30-minute delivery) and ghost kitchens for meal delivery.

Through these and other initiatives, Kroger is positioning itself to remain the leader in the US grocery industry for years to come. As CEO Rodney McMullen stated in the company‘s 2021 annual report:

"Kroger is uniquely positioned to win in the marketplace. Our competitive moats – seamless ecosystem, incredibly strong Our Brands portfolio, unparalleled personalization and innovative solutions – put us in a much stronger competitive position than our competitors with lasting and durable competitive advantages."

The Bottom Line

So, to answer the question directly: no, Kroger does not own Tom Thumb as of 2023. Tom Thumb was previously owned by Kroger, but was sold to the EG Group in 2018 as part of a larger divestiture of Kroger‘s convenience store business.

Today, Tom Thumb is part of the EG Group family of brands, which also includes Cumberland Farms, Fastrac, Certified Oil, and Minit Mart in the US. In the coming months, Tom Thumb stores will be rebranded to the Cumberland Farms banner as part of EG Group‘s strategy to create a more unified brand experience.

Kroger, meanwhile, remains the largest traditional grocery chain in the US, with over 2,700 stores across 35 states. The company has continued to post strong sales and earnings growth in recent years, driven by investments in e-commerce, technology, private label brands, and new store formats.

For shoppers, the choice between Kroger and Tom Thumb (soon to be Cumberland Farms) will likely come down to factors like location, convenience, product selection, and price. Kroger stores offer a wider selection and often lower prices, while Tom Thumb/Cumberland Farms stores prioritize convenience and speed.

Ultimately, the grocery and convenience store industries in the US remain highly competitive and dynamic, with ongoing consolidation, innovation, and evolution. As a shopper, it‘s worth staying informed about the latest developments and being open to trying new stores and brands that may offer a better value or experience.

And as a retail and consumer expert and picky shopper, my advice is to always do your research, compare prices and quality, and don‘t be afraid to switch things up if a better option comes along. Happy shopping!

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