Kroger 2007 Annual Report Download - page 40

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Please find page 40 of the 2007 Kroger annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

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Three-Tier Distribution Network
Kroger is the only major supermarket with a nationwide three-tier
distribution system. The first tier consists of local dry grocery, perishables,
and freezer buildings that service stores – generally within a 200-mile
radius – with quick turn and perishable products. These distribution
centers also serve as the Company’s cross-dock centers for palletized
merchandise that is going directly to a retail store.
The second tier consists of consolidation centers that service retail stores –
within a roughly 350-mile radius, for slower turn pharmaceuticals, health-
and-beauty care items, and dry grocery merchandise. These regional
consolidation centers allow Kroger to purchase in larger quantities at the
lowest possible price bracket. The product is piece-picked, sleeve-picked,
or case-picked depending on value and movement, and shipped directly to
stores two or three times each week.
The third tier ships seasonal and promotional products to stores in an even
larger geography than the consolidation centers.
This tiered network system is supported with new technology for improved
operations and more cost-effective store delivery. “Demand Forecasting”
technology utilizes certain store-specific and market data to enhance the
Company’s store ordering system capabilities. This capability
enhancement is a reality with the creation of Kroger’s data warehouse,
The Kroger Co. Page 40