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Kroger Fixed Cost

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Fixed and Variable Costs Company’s fixed and variable cost can affect the level of competition in this industry. Companies have high fixed costs and variable costs in the market, they will try to cut prices to increase demand in their stores in operation. In the grocery retail industry in the US market, the majority of grocery retailers have and operate their own stores and distribution center, and these increase Kroger’s fixed cost because of overhead and maintenance cost. Even if the fixed cost is high, the variable cost of goods sold which is the second highest cost can offset it. The ratio of fixed assets and variable costs is very crucial for a company within the industry. This figure below shows the fixed asset to variable cost ratios…show more content…
Kroger competes with its rivals by having good product quality, product variety, and customer services. Kroger insisted that product quality is crucial in building consumer loyalty and brand image. Great companies do not just get new customers, they want customers come back for more. Customer loyalty brings long-term sales, and Kroger did a very good job on this. Kroger’s outstanding private brand products had earned the market share. “Consumer research, the finest ingredients, and our rigorous testing produce the quality behind our corporate brand” (Kroger, 2015). Kroger is able to monitor the production and distributions of their products; it has developed one of the strictest inspection and specification systems in this grocery market. According the research, the quality of beef is checked by some tests such as USAD Choice, Certified |Angus USAD Choice, and Natural Beef Select. Kroger also promised that their pork is 100% natural and poultry products are grown organically and locally. Seafood, vegetables, and fruits are guaranteed to be fresh. All products in Kroger are held to the same high standards. Because of its time efficient systems and distribution systems, Kroger can stock new and fresh products every
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