When you visit a major grocery store or gas station, you expect it to carry all the major brands.
It’s not uncommon for a favorite flavor or size to be out of stock, but if you went to your local Publix, Wawa, or 7-Eleven and found no Pepsi products or shelves that simply no longer stock Starbucks iced coffee drinks, you would be surprised.
In most cases, if that happened to me, I’d assume the store had a delivery problem. Even if I saw the items missing from a few stores, I’d suspect it was a short-term glitch.
That’s not the case with Kroger’s supermarkets and gas stations and Red Bull, the popular energy drink line.
“Supermarket giant Kroger has clipped Red Bull’s wings as the grocer has stopped selling the popular energy drink at all its stores and fuel centers nationwide,” the supermarket giant confirmed to The Cincinnati Enquirer.
Kroger is taking a pricing stand on Red Bull
A visit to a Northern Kentucky Kroger store this week confirmed no Red Bull on the shelves, local news station WCPO reported. In its place, a sign posted in the energy drink aisle reads:
“We are currently out of stock while we work with our suppliers to keep prices affordable for you.”
A Kroger employee told WCPO the company and Red Bull are currently in a dispute and that no new shipments are expected in the meantime.
RTM Nexus CEO Dominick Miserandino thinks that the dispute comes down to price.
“Kroger pulling Red Bull off the shelves comes down to basic shelf math. Red Bull wants to raise wholesale prices, and Kroger refuses to pay it,” he told TheStreet.
A visit to the Red Bull page on the Kroger website showed the following message:
“We’re sorry, but there was a problem displaying these items. Please try again. If the problem persists, contact Customer Servicefor assistance.”
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More products missing from Kroger shelves
The grocery chain also has a similar dispute with Boar’s Head and has removed the company’s deli meats from shelves at many, if not all, Kroger locations.
“Boar’s Head products will no longer be offered at this location. We continue to provide a variety of high-quality deli meats and cheeses, including many customer favorites from our premium deli selection,” Kroger said, as WCPO reported.
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Prices for Boar’s Head deli meats, including oven-roasted and maple honey turkey, had recently climbed to $14.99 a pound, according to the news station.
“Supermarket margins are already thin. If Kroger absorbs the price hike, they make no money. If they jack up the price at the register, people just buy another brand,” Miserandino said.
This dispute is Kroger betting that customers will substitute similar products when certain brands are missing.
“Red Bull thinks customers will walk out of the store if they can’t get their can. Kroger is betting that people buying groceries just grab a Monster or a Celsius instead. End-cap coolers are prime real estate. Kroger isn’t going to let Red Bull sit on that space for free if the math doesn’t work,” he added.
A request to comment from Kroger was not immediately answered.
Related: Kroger wants you to stop buying the brands you grew up with
Kroger’s CEO is making a value push
While he has not commented on the Red Bull or Boar’s Head situations, Kroger CEO Gregory Foran has made it clear that value is a core part of his turnaround vision for the chain.
“Our goal remains simple. We are building America’s favorite grocer. Customers want value, quality, convenience, and a shopping experience they can trust. When we deliver those things consistently, we earn bigger baskets, and more trips,” he said during the company’s second-quarter earnings call.
He did, however, acknowledge that having the products customers want in stock is also important.
“An opportunity remains inside our stores, better in-stocks, better merchandising, better standards, and better shrink management. These are not new ideas. But customers notice when we execute well. This quarter, on-shelf availability reached an all-time high,” he added.
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