Say What? Kroger to Now Sell … Clothes?

The company is testing the sale of apparel in some stores

   

Recently, big-box retailers like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) have expanded their have-it-all selections to include food and groceries — a move that gave the latter a nice boost last quarter.

Now, though, the tables have turned. Kroger (NYSE:KR), the nation’s largest supermarket, is testing a move to sell clothing at its stores. So far, the trial is only taking place in one store in Ohio.

The strategy may seem surprising, but actually makes sense if you consider the fact that grocery stores are always plagued by slim margins and high competition. The company is hoping it will be able to boost traffic and steal back customers from its mega-retail rivals.

Still, whether or not the one-shop-stop experiment will be successful still remains to be seen — and other grocery stores like Safeway (NYSE:SWY) and struggling SuperValu (NYSE:SVU) will undoubtedly be watching closely.

The concern is that the reaction by customers may be akin to the one this very article’s headline touts: Say what?

Many shoppers may simply be confused when they walk in to check things off their weekly shopping lists, and see sweatshirt and sweaters for sale as well.

Apparel, though, is at least a less-risky venture than Kroger’s previous attempt at selling furniture. The company can only hope that the low risk with come with high reward.

As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2012/09/say-what-kroger-to-now-sell-clothes/.

©2014 InvestorPlace Media, LLC

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