- Kroger hired Aldi veteran Liz Ferneding to take over its vacant role of president of its Ruler Foods discount division, the grocer said in a statement.
- The hire is an unusual move for a company that usually promotes from within its own ranks, according to Supermarket News. The appointment appears to signal the company’s intentions to further develop and expand the Ruler banner even as it faces growing competition from other retailers including Aldi and Lidl.
- "Liz's extensive grocery retail experience in procurement, marketing, advertising, management and operations will be an asset to our Ruler associates, customers and community," Rodney McMullen, Kroger's chairman and CEO, said in a statement. "We have a lot of respect for the Ruler format and the customer it serves. Liz's talent and insights will help us sharpen our value-centric, small-format store."
The shrewd move by Kroger to snag Aldi veteran Liz Ferneding as president of its Ruler Foods discount division is a testament to how competitive the grocery space has become — and the severity of the struggles the Cincinnati-based supermarket operator has faced in recent months. Kroger cut its forecast by 10% in its most recent earnings report and noted that same-store sales fell for a second consecutive quarter — following 13 years of uninterrupted growth in the key metric. A day later came another bombshell following news that Amazon was buying Whole Foods for $13.7 billion.
Kroger, the nation's largest supermarket chain, rarely goes outside its own company to fill vacancies. In this case, it found the perfect opportunity to poach an executive from a discounter whose detailed corporate knowledge and innerworkings of the industry could help Kroger's own operations. Aldi, which operates more than 1,600 stores, is planning to spend $3.4 billion to expand to 2,500 stores across the U.S. by 2022. Kroger has little choice but to push forward — while Aldi, a price-aggressive Walmart and the recent arrival of Lidl to the United States all take aim at Kroger and other traditional grocers.
The game of executive musical chairs in the grocery space is not uncommon, and discounters are working to get the best people into vacant positions. Just this week, Lidl US hired former Walmart executive Kevin Sweet as its new senior director of real estate. Jose Tamez of executive search firm Austin-Michael told Supermarket News that Sweet, who has a track record of finding good store locations, “could end up being the best hire, short of the new CEO, that they have made to date.”
In this case, Ferneding likely possesses a keen understanding of what a discounter needs to be competitive and the steps it must take to attract and retain customers who have a plethora of options to chose from in getting their groceries.
Ruler Foods, with nearly 70 locations, is a warehouse store grocery chain. About 80% of the offerings are Kroger Brand, customers bag their own groceries at the checkout and shopping carts cost 25 cents — which is returned when the cart is replaced. Aldi takes a similar approach, carrying 90% of its own brands and charging for shopping bags and carts.
Aldi's model has proven to be a success, and Kroger, eager to distance itself from its recent struggles and grow its deep-discount brand, is looking for help from a fierce competitor to help it regain momentum — grabbing one of its top executives is a sound first step.