by Corey Gibson
In the words of a Cincinnati Times-Star editorial, “Barney Kroger represented an era which the dominant political currents of our time have ended, perhaps forever. It was a rough-and-tumble era, which developed some very obvious faults but which had even more obvious merits. It was the era of free enterprise.”
Bernard Henry Kroger was born in January, 1860, to a family of German immigrants who ran a dry-foods store in Cincinnati, Ohio. It is rumored that his first toy was a cigar box that Kroger turned into a model for a grocery store. After dropping out of school at the age of 13, Bernard got his first job working seven days a week at a pharmacy. The long hours and low wages were no reason to quit, however, Kroger’s mother insisted he find another job where he did not have to work on the Sabbath. Although money was tight, Kroger did not argue and promptly quit his job.
Kroger’s next job was that of a farmhand for a large farm in Warren County. For nine long months, Kroger worked every day in the fields for a measly $6 dollars a week. Even after contracting malaria, Kroger would not quit, determined to show his mother that he was not a quitter. Alas, after his spirits were broken, on a cold December day, Kroger quit the farm job. He opted to walk the 35 miles home and save the bus fare.
His next job brought him to the business he would later dominate; the food retail industry. Soon after quitting his farm job, Kroger received a job working for the Great Northern and Pacific Tea Company. By the end of his first day working as a door to door salesman, Kroger had sold $35 worth of coffee and tea, and with the %3 commission, Kroger had made 85 cents in his first day on the job. During the remainder of the week, Kroger grossed a $7 paycheck, the most he had ever made in a week.
Soon after he began working at the store, it was sold to new owners who charged more for an inferior product. Kroger found that many of his old customers would not buy from him anymore and he pointed to this experience as the one that most forcibly taught him that people, even those of meager income, would pay more money for good food.
Soon after the new owners had taken charge, the store began to fail. The owners turned to Kroger to save the store. After Kroger outlined his demands of $12 a week and 10 percent of the profits, he was named manager of the new store, The Imperial Tea Company. By the end of his first day, Kroger had fired the entire staff, besides the delivery boy, bought a new cash register and hired a cashier to run the machine. They were the entire staff.
In 11 months as manager of The Imperial Tea Company, Kroger had turned the store around and gained a net profit of $3,100. With the profit from the previous year, Kroger explained to the owners that it would be wise to open a second store on the other side of town, but the owners didn’t listen to their young manager. Kroger saw this naïve thinking as an ending point for the store. He withdrew his profits and quit The Imperial Tea Company to start his own store.
At the age of 23, on July 1, 1883, Kroger combined his $372 in savings with a $350 loan from a friend, B.A. Branagan, and rented a small store near the riverfront, at 66 E. Pearl St, for $40 a week. He named it the Great Western Tea Company. Kroger worked longer hours than he had ever before, pouring over the records of the store, ordering food, preparing coffee and tea for the next morning and any other necessities that came about. But a couple of disasters would nearly cripple the new business before it got on its feet.
This first disaster came when Branagan was delivering food in the newly purchased wagon. He was trying to beat a train to deliver his groceries on time, but instead, narrowly escaped death. The cowcatcher on the front of the train clipped the back of the wagon, splintering it in half, killing Kroger’s newly purchased horse and throwing Branagan clear of the wreak. A total lose of $518 came from the fiasco.
The next disaster came from the flooding of the Ohio River. The river had risen to 71 feet and had flooded Kroger’s entire store; $365 of merchandise was lost.
But Kroger prospered. In his first year, Kroger was out of debt and had $2,260 worth of assets to his name. After a year in business with Branagan, Kroger offer to buy out his share in the company for $1,500, to which Branagan agreed. Kroger was now the sole owner of The Great Western Tea Company. And he was demanding as ever that his quality of food be the best around. One such tale of his demands demonstrates his ability to sell and his strive for the best.
As quoted from a pamphlet distributed by The Kroger Company called “Barney Builds a Business” is a story about Kroger’s demands for quality and customer service:
“Calling on a woman at her door, Barney asked her for her coffee order. He was met with a refusal. His coffee, she said, didn’t taste good and besides she was having a party. Her house was full of friends so would he please go away. Barney told her that he his coffee was good. Would she let him in to her kitchen to demonstrate? He’d be glad to serve free coffee to all the guests. Her friends, who were by that time peering around her from behind, urged her to let the young man try. They agreed that the coffee didn’t taste particularly good. Reluctantly the housewife let him in.
The first thing Barney did was to begin scrubbing the coffee pot. The pot must be very clean he said and his hostess blushed. Her coffee pot wasn’t very clean. He explained patiently how to brew coffee correctly as he went along. When he finished he served the coffee. It was delicious. His hostess was enraged at the affront to her ability and her guests were secretly delighted. The event was of course the talk of the town. Barney had lost one customer but had gained a hundred.” He would take nothing but the finest.
In 1885, Kroger expanded his growing business by buying his second store and a year later buying two more, giving him control of four stores within three years.
The final hurdle for Kroger was the panic of 1893; the bank he had his entire life savings and that of his stores, $80,000, was on the brink of failure. Kroger had to make a choice between taking out as much as he could before it failed, or trusting his instincts that the bank would not fail. He kept his money in the bank and the bank pulled through the depression with all of Kroger’s money still there. With everyone else scared their banks were going to close, sellers were desperately looking for buyers and Kroger ran a tough bargain. He snatched up every deal he could find and at the end of the year he had a profit of $112,000 and was the proud owner of 17 stores.
In 1902 Kroger renamed his store the Kroger Grocery and Baking Company and by the 1920s his empire had grown to its peak of 5,575 stores nationwide. He was able to accomplish such quick success by offering what his competitors weren’t; low prices. He bought all his products in bulk to keep the retail prices relatively low and he added the first in-house grocery store bakeries and meat departments.
Shortly before the Stock Market Crash of 1929, Kroger sold his stock of the company for $28 million. Whether it was a stroke of luck or financial suave was never determined. Kroger even bought back a third of the company during the Depression to demonstrate his confidence in the company.
With his huge amount of finances intact throughout the Depression, Kroger also made huge contributions to different Cincinnati causes, often without recognition. He donated five Bengal Tigers to the Cincinnati Zoo, opened numerous city parks and gave money to help research Tuberculosis, among other things. And as with his company, Kroger was intolerant towards mismanagement in government as well. He protested questionable practices at City Hall, bringing better government to his beloved city. As one reporter wrote “he speaks his piece in language that cannot be misunderstood.”
Kroger died in July 1938, at the age of 78.