Kroger CEO David Dillon speaks to Wichita Rotary about innovation

06/28/2011 11:00 AM

06/28/2011 11:00 AM

The heart of the grocery business is innovation, Kroger's CEO told a packed Wichita Rotary Club luncheon Monday.

And the center of much of that innovation has been Wichita and Kansas, said David Dillon, the Hutchinson native who runs Kroger.

Dillon and several members of his Kansas management team came to the Rotary luncheon to reaffirm the company's commitment to Wichita, along with its innovation roots here.

One huge example, Dillon said, is the evolving partnership between Dillons and Kwik Shop, the Kroger-owned convenience store chain.

"This is the only market in the United States where Kwik Shop, Dillons, the Marketplace stores, jewelry, the gas program and the variety of combo stores we have exists," he said.

"It's a remarkable combination, and we've put a lot of effort into finding ways for Kwik Shop and Dillons to work together. And what a lot of people don't know is that it happened because of Greensburg."

In fact, Kroger's response to the May 4, 2007, tornado that struck the city — including the company's Kwik Shop and Dillons stores there — set the stage for the partnership.

"The town wasn't big enough likely for us to rebuild a Dillons store," Dillon said. "We reopened the Kwik Shop quickly.

"And credit to Gov. Sebelius (then-Kansas Gov. Kathleen). She didn't call us and say you have to reopen that store. She said, 'I know you have to make an economic decision and I know the decision is you can't reopen that store. But before you say no, please remember that the residents there to rebuild need a grocery store. I'd appreciate it if you'd use your imagination to think about how you can address that problem for that community.' "

So, Dillon put his grocery and convenience store teams together and the result was a Dillons/Kwik Shop combination.

"It was the first time those businesses worked together," Dillon said. "They were always owned by the company, but we always saw them as separate businesses existing on their own."

Out of Greensburg grew the gas points initiative, which allows shoppers to earn points at Dillons or Kwik Shops; Dillons bread and milk at Dillons prices in Kwik Shops; and Kroger brands in Kwik Shops at similar prices.

It's the kind of innovation, Dillon said, that is the hallmark of the Kroger and Dillons chains.

"Somebody at Kroger had the vision to be different," he said. "They needed innovation. They needed more product. They needed bigger stores. They needed lower prices. They needed to evolve into something different.

"And five or six times since the 1930s, we have evolved at Kroger into a much more modern store."

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