As consumer preferences evolve and the retail landscape shifts, supermarket chains must adapt to stay relevant. Over the past two decades, the rise of supercenters, warehouse clubs, and e-commerce have conditioned shoppers to expect not only groceries, but a full assortment of general merchandise under one roof or on a single platform.
To meet this demand, Kroger, America‘s largest supermarket operator, introduced the Kroger Marketplace format in 2004. These multi-department stores significantly expand Kroger‘s offering beyond groceries to deliver a comprehensive one-stop shopping experience. In this deep dive, we‘ll explore the Kroger Marketplace ecosystem and assess how it stacks up for discerning shoppers.
The Marketplace Difference
So what exactly sets a Kroger Marketplace apart from a standard Kroger supermarket? In a word – variety. Kroger Marketplace stores average around 125,000 square feet, nearly double the size of a traditional Kroger grocery store. That extra space is filled with departments devoted to home goods, apparel, toys, consumer electronics, and other products not typically sold at supermarkets.
"The Kroger Marketplace is our largest format store, with an incredible variety of food and general merchandise under one roof," said Rodney McMullen, Kroger‘s CEO. "It‘s really designed for that customer who wants to complete their shopping list in a single stop."
The expanded assortment is the key differentiator for Marketplace stores. Within the grocery department, there are often more specialty, natural, and organic products featured. The produce section may stock exotic fruits, the deli offers gourmet cheeses, the bakery has artisan breads. Apparel spans basics to trend-right fashion. Home merchandise ranges from countertop appliances to furniture to decor. And the toy department is stocked with top brands kids love.
"Our goal with Marketplace is to offer something for everyone," said Mary Ellen Adcock, Kroger‘s SVP of Retail Operations. "We want these stores to be a destination that can meet your needs across the board, whether it‘s tonight‘s dinner, this season‘s wardrobe, or your child‘s birthday party."
Marketplace by the Numbers
As of 2022, Kroger operates 137 Marketplace stores across the U.S., representing about 5% of the company‘s 2,723 supermarkets. For reference, that‘s on par with the number of SuperTarget locations Target runs, though well below the nearly 4,000 Walmart Supercenters nationwide.
Kroger Marketplace stores generated $15.1 billion in sales in 2021, or roughly 11% of the company‘s total sales volume.
The Marketplace format has grown steadily since launching in 2004, though expansion has moderated in recent years as Kroger focuses on productivity vs. footprint growth. Still, the company continues to selectively open new Marketplace stores in high-potential markets like California, Florida, and the Mid-Atlantic states.
"We‘re really pleased with the performance of our Marketplace stores," said Gary Millerchip, Kroger‘s CFO. "On a per-square-foot basis, they generate some of our highest sales and are a key piece of our long-term growth strategy."
Indeed, while Marketplace stores represent just 5% of Kroger‘s store count, they account for over 10% of sales and an even higher portion of profits. On average, a Marketplace does more than twice the sales volume of a regular Kroger supermarket.
Inside the Aisles
To understand what drives that productivity, let‘s examine the Kroger Marketplace layout and product mix in more detail:
Grocery: Marketplace stores boast an expanded grocery assortment that aims to satisfy every taste preference. Kroger‘s Simple Truth natural and organic brand is heavily featured alongside national brand counterparts. Store Brands like Private Selection offer upmarket touches at a value price. And the specialty and international items span the globe from Latin American to Asian fare.
Fresh Departments: Kroger has always hung its hat on fresh food, and Marketplaces double down with larger footprints for produce, meat, seafood, deli, and bakery. It‘s common to find salad bars, olive bars, sushi stations, and freshly cut fruits & veggies. Some locations even have dry aged beef, fresh handmade pasta, or oyster bars.
Health & Beauty: The wellness aisles at a Marketplace go far beyond your typical drug store. The pharmacy offers immunizations, medication consultations, and even clinic services. Aisles are stocked with specialty supplements, aromatherapy, and organic personal care products. And there‘s often an expansive cosmetics section with prestige beauty brands.
Apparel: From basic socks & underwear to seasonal trends, Marketplace stores aim to outfit the whole family. Clothing is displayed on hanging racks with sizes clearly labeled. Fitting rooms are available to try items on. And some stores even employ fashion consultants to provide styling tips.
Kroger‘s apparel strategy emphasizes basics, kids clothes, and activewear vs. competing directly with traditional fashion retailers.
Home & Electronics: Everything from small electrics to furniture to decor falls under the home department at Kroger Marketplace. Kitchen gadgets from brands like Cuisinart, Ninja, and KitchenAid are common. Home office setups with desks, chairs, and printers are featured alongside tablets, headphones, and smart home accessories.
Baby & Kids: Kroger Marketplace is a top destination for busy parents seeking a single stop to shop. Stores carry an expanded selection of diapers, wipes, formula, and baby food. Feeding, bathing, safety, and nursery products are grouped for convenience. And the toy aisles are filled with items from Lego, Nerf, Barbie, Hot Wheels, and other popular children‘s brands.
Outdoor Living: Some Marketplace locations even cater to outdoor enthusiasts with a seasonal assortment of grills, patio furniture, gardening supplies, and live plants. Select stores will also have fuel stations, propane tank exchange, and auto supplies.
Expert Analysis
Retail futurist Doug Stephens of Retail Prophet Consulting sees Kroger Marketplace as a savvy play to unite many customer needs under one banner:
"The future of retail is not about being everything to everyone, it‘s about being everything to someone," Stephens said. "With Marketplace, Kroger has crafted a unique selling proposition that offers unparalleled convenience for busy shoppers who value their time and want to minimize their errands."
The beauty of the Marketplace format is how it integrates multiple shopping occasions into a single curated assortment
"By offering such a wide range of categories, Kroger can capture a greater share of wallet from their customers," Stephens said. "They‘re banking on the notion that once you trust them with your grocery list, you‘ll entrust them with more of your discretionary spending as well."
Burt Flickinger III, Managing Director at Strategic Resource Group, sees Kroger Marketplace as a vital weapon in competing with retail giants like Walmart:
"Kroger needed a supercenter concept to stay relevant as customer preferences shifted," Flickinger said. "By rolling out Marketplace stores in their stronghold markets, Kroger was able to defend their turf and prevent leakage of shoppers to Walmart Supercenters."
Industry data shows that Kroger Marketplace locations help boost overall shopping frequency and basket size
"A customer who may have previously cherrypicked the best grocery deals at Kroger while buying their clothes, electronics, and toys at Walmart is now more likely to consolidate those purchases at a Marketplace," Flickinger said. "The proof is in Marketplace‘s higher rings and operating profits compared to traditional Kroger stores."
The E-Commerce Equation
Of course, the modern retail battleground extends beyond brick-and-mortar to the digital realm. To that end, Kroger has moved aggressively to integrate its Marketplace stores with its e-commerce infrastructure.
In 2020, Kroger launched an online marketplace to complement its existing direct-to-customer Kroger Ship platform. This marketplace allows third-party sellers to offer their products to Kroger‘s digital customers, adding over 50,000 new items to the online assortment.
"Our marketplace provides Kroger customers with a more comprehensive selection, enabling us to serve many more of their daily needs," said Stuart Aitken, Kroger‘s SVP and Chief Merchant & Marketing Officer. "Kroger‘s online marketplace expands our reach further into multiple categories and amplifies Our Brands portfolio."
By blending owned inventory with that from third-party sellers, Kroger‘s online marketplace mirrors the variety found in Kroger Marketplace stores. Orders are fulfilled either from stores or distribution centers through Kroger‘s network of 18 automated e-commerce fulfillment centers powered by Ocado.
70% of the U.S. population now has access to Kroger‘s online marketplace with options for delivery, in-store, or curbside pickup
Combining this digital ecosystem with the geographic footprint of its Marketplace stores gives Kroger a compelling omnichannel offering that makes shopping across categories as easy as clicking a button.
The Bottom Line
After nearly two decades of iteration and expansion, Kroger Marketplace has established itself as a leading retail concept that satisfies shoppers‘ desire for a one-stop destination. By broadening its aisles beyond groceries to include home goods, clothing, electronics, toys, and more, Marketplace stores drive incrementality for Kroger.
"Kroger Marketplace is really about solving customer problems and fitting conveniently into their lifestyle," said McMullen, Kroger‘s CEO. "We‘ve built a store where you can check every item off your list, from milk and eggs to jeans and TVs, then head home feeling accomplished."
As Kroger celebrates 139 years in business, concepts like Marketplace demonstrate the company‘s ability to evolve alongside the customer. With a strong value proposition, omnichannel integration, and commitment to service, Kroger Marketplace appears well-positioned to keep delighting shoppers for decades to come.
