CINCINNATI — The Rev. Jesse Jackson said Tuesday he wasn’t sure whether he believed Kroger’s claims that a Cincinnati store was unprofitable before it was closed last year.
In Cincinnati to protest the nation’s largest supermarket chain’s retreat from here, Memphis and other markets, Jackson said minority communities suffer when local consumers lose access to groceries.
“I’m not sure it’s true,” Jackson said responding to a question about Kroger’s profit concerns. “Clearly, if you look around there are people here who eat and buy groceries. Is it a management issue or a consumer issue? People are certainly consuming.”
Jackson called for a boycott last week against Cincinnati-based Kroger (KR) in response to closing stores in Memphis and other communities that had served minority communities, including the Walnut Hills neighborhood in Cincinnati.
“Kroger in the heart of the black community pulled out — it created a food desert,” Jackson told The Cincinnati Enquirer on Monday. “It has a negative impact on the community.”
Late Monday, Kroger defended its store closure decisions, saying they must turn a profit in order to serve customers.
“Because we operate a ‘penny profit’ business, we must sometimes make tough decisions in order to keep our prices low for all customers,” Kroger said in a statement, adding no jobs were lost after it cut the Walnut Hills store or three recent closures in Memphis. The company pledged to stay “an active community citizen” and added it was “always open to suggestions and dialogue.”
Kroger closed its Walnut Hills store last spring after 34 years of operation — more than 20 of them unprofitable. Company officials said the store was projected to lose $900,000 last year if they kept it open on top of the nearly $5 million it had lost since 2010.
The Walnut Hills closure coincided with the reopening of an expanded Kroger Marketplace store 1.3 miles away.
As digital competition heated up for supermarkets, Kroger has retooled its store spending in recent years.
Two years ago, Kroger announced plans to spend more than $4 billion in capital expenditures in 2016 — much of it on supersizing supermarkets into Marketplaces as well as refreshing, relocating or refurbishing physical stores.
Those plans were pared back to $3 billion initially amid a price war with Walmart and deflation woes, then digital juggernaut Amazon’s 2017 takeover of Whole Foods. Kroger, Walmart and other grocers have been scrambling since last summer, rolling out their own digital strategies as Amazon expands home delivery of supermarket staples.
While Kroger is still spending $3 billion a year on its physical stores, more of that money has been moved toward ramping up functions that support digital sales. Kroger now offers its buy-online, pickup-at-the-store ClickList service to more than a third of its stores.
Kroger also is ramping up partnerships across the country to offer home delivery services — now available in 45 major U.S. markets.
While in Cincinnati on Tuesday, Jackson also plans to speak to community leaders to discuss potential disenfranchisement of the city’s black community and the proposed stadium deal for the city’s soccer team, FC Cincinnati.