Kroger spending more than one billion on healthcare


America’s largest grocery chain—#23 on the Fortune 500 list

AKroger carts huge organization (5th largest retailer in the world), Kroger reports for 2012: $90 billion in sales, $1.3 billion in profits and 343,000 employees. My estimate is that by cutting their cost of healthcare in half, they could increase their profits by up to 50%—without selling any more groceries.

Like all large food chains, Kroger serves a market of millions of people and must cater to ALL of their grocery needs. But, as we know from the CEO of Whole Foods Market, just because his store has to sell all forms of meat, dairy eggs and processed foods—it doesn’t mean that he and his employees must eat all of them.

But unlike the other large grocery chains, John Mackey of WFM understands the health-promoting qualities of a whole foods, plant-based diet and he’s sharing that knowledge with his 64,000 employees—a move that is resulting in a decline in his cost of health care as a percent of revenue. Mr. David Dillon of Kroger could do the same, and since he’s got five times as many employees as Mackey, his potential savings are five-fold that of the savings beginning to accrue at Whole Foods. 

David Dillon, CEO

David Dillon, CEO of The Kroger Company

So why would Mr. Dillon want to copy Mr. Mackey? Because he is a good businessman and he believes in delivering value to his customers and his shareholders. He also sounds like the kind of guy that enjoys doing wonderful things for his employees.

And with a toal cost of healthcare that is probably well north of ONE BILLION DOLLARS, he could be looking at a virtual goldmine in savings. Not to mention the benefits of a healthier, happier and more productive sales force and the many PR benefits that would follow.

Leadership. I recently saw Mr. Dillon in a KU (Kansas) sponsored video in which his topic was “Leadership: Is anyone following you?” Then, just this week, I saw that Kroger had reported their first quarter 2013 results—posting their 38th consecutive quarter of positive sales increases.

“Kroger achieved strong sales and record earnings per share for the quarter, and our customers’ positive view of us continues to improve,” said David B. Dillon, Kroger’s chairman and chief executive officer. “This is because of our continued focus on the Customer 1st strategy.

“The Kroger team’s relentless focus on delivering on our Customer 1st strategy, quarter after quarter, continues to set us apart,” Mr. Dillon said. “We will continue to build on this strong momentum to drive growth and greater shareholder value.”

Sounds to me like there are about 343,000 people following the positive leadership of Mr. Dillon. Also included in the June 20 news release: “Recognized by Forbes as the most generous company in America, Kroger supports hunger relief, breast cancer awareness, the military and their families, and more than 30,000 schools and grassroots organizations….”

Kroger Sus Report 2013Kroger also places a great deal of interest on the environment. From the Kroger Sustainability website, Mr. Dillon’s letter includes:

We remain committed to making thoughtful and responsible choices to minimize our impact on the environment—some examples include, among others: (1) Achieving total energy reduction of 32.7 percent from our base year. We are on track to meet our goal of a 35 percent reduction by 2015. (2) Continuing our partnership with the World Wildlife Fund and supported four wild-caught fishery improvement projects around the world.

From what I read about Mr. Dillon, I like his style. And I sincerely believe that he would soon have hundreds of  thousands of his fellow associates “following” his lead if he began helping them to learn how to take charge of their health. So, I sent him a letter, book and 4Leaf Wellness Vision document to his office in Cincinnati:

      • July 3, 2013
      • Mr. David Dillon, CEO
      • The Kroger Company
      • 1014 Vine Street, Cincinnati, Ohio 45202
      • Subject: Slashing the cost of healthcare in businesses

Dear Mr. Dillon,

Congratulations on being recognized by Forbes as the most generous company in America. You have a great reputation for taking care of your customers, shareholders and employees, while being exceptionally generous when it comes to social, environmental and economic sustainability. As for taking even better care of your employees and your shareholders, I have an idea that I would like to discuss with you.

A Kroger store in Denver

A Kroger store in Denver

It has to do with the out-of-control cost of healthcare in our nation. With 343,000 employees, I estimate that Kroger is currently spending well over one billion dollars a year, and that number will continue to increase until we shift the paradigm from managing disease to truly promoting health. By helping your employees take charge of their own health, you’ll save a fortune while making the world a much better place to live. 

Did you know that our unhealthy food choices are driving up to 80% of the cost of healthcare in the USA? That means that you could conceivably eliminate several hundred million dollars of expense—while further enhancing your company’s already sterling reputation as an industry leader.

As the leader of the world’s 5th largest retail chain, you’re in a perfect position to lead the way when it comes to addressing the cost of healthcare in the USA. As you said in a Kansas University sponsored speech earlier this year, “Leadership: Is anyone following you?” You begin with helping your employees take charge of their health, and they will reward you by pushing more profits to your bottom line. You will then gradually educate your customers while continuing to provide them ALL of the food products that they wish to buy.

Who am I and how can I help? Like you, my working career began in the grocery business—at the National Food Store in Murfreesboro, Tennessee. I studied Industrial Engineering at Auburn University and later earned an MBA from the University of Hawaii while on active duty in the U.S. Coast Guard. Since then, most of my career has been devoted to improving profitability in numerous enterprises by eliminating waste in diverse companies like Sears, ITT, and Holiday Inns. My last executive position was EVP of Operations with Polo Ralph Lauren Corporation. 

So what about promoting health and saving money? The attached “vision” document outlines our detailed approach to helping you lower your cost of healthcare by anywhere from 15% to 50%. Those are VERY big dollars at Kroger and I would like the opportunity to review our powerful new approach to corporate wellness with you in person.

As you can see from my website (hpjmh.com), I am now directing my “waste reduction” skills to a new arena, focusing on something that may be the most important issue in the history of the world. I am talking about our food choices and the collective impact that they have on our health, our cost of healthcare, our environment—and, ultimately, the long-term sustainability of the human species.

Since 1960, the cost of health care in the United States as a percent of our gross domestic product (GDP) has risen sharply from 5.2% in 1960 to the 18% that we have today. Most of this huge problem is driven by our food choices—and it’s still getting worse. I have concluded that our only way out of this mess is for the CEOs of America to take the lead. That’s because corporate CEOs are the only prominent leaders in our nation with a strong financial incentive for all of their employees to be healthy.

Corporate Wellness. The 4Leaf vision of a whole new ballgame

Corporate Wellness. The 4Leaf vision of a whole new ballgame

In developing our attached “corporate wellness” vision document, I drew heavily on the counsel of my friend Paul Allaire, the former CEO of Xerox. Now retired, he is a strong believer in the approach outlined in our book and has made it very clear to me that this kind of initiative does not have a prayer unless the top guy is driving it.

We agree. That’s why I am writing directly to you. By the way, Mr. Allaire provided the following endorsement that appears on the back cover of our book (which is enclosed):

“We all know we should eat more fruits and vegetables—with this book, we now know why. The authors make a well-documented case for why it is important for your personal health and why it is critical for the health of the planet. A compelling book; it is both informative and a pleasure to read!” —Paul Allaire, Fortune 100 CEO (Xerox, 1990–1999)

Please take a look at the attached document; then let’s meet in person to discuss. On the last page of the enclosed document, you will see a summary of my credentials for helping you take hundreds of millions of dollars a year out of your cost of health care—while yielding a healthier, happier and more productive workforce as a fringe benefit. 

As for Kroger’s well-known emphasis on sustainability, influencing your associates to adopt plant-based eating will do more good for the environment and world hunger than ALL of your current sustainability initiatives—combined.

I look forward to hearing from you and meeting you soon.

Sincerely,

J. Morris (Jim) Hicks

PS: There are only two prominent CEOs (to my knowledge) who are doing anything close to resembling what I describe in the attached “vision” document. They are John Mackey at Whole Foods Market and Mayor Rahm Emanuel at the City of Chicago. And, in both cases, their cost of healthcare is going down.

ATTACHMENT. 4Leaf Corporate Wellness—Vision Document

Phillip Wollen---argues in Australia for taking meat off the menu.

Phillip Wollen—one of Australia’s most prominent citizens (former Citibank to exec)

Endorsement from down under. After reading my similar letter to the CostCo CEO, my friend Philip Wollen (former Citibank top executive in Australia) sent me this note; gotta just love that second line.

Dear Jim,

You have written a powerful document. Any CEO who does not read it with a racing pulse should be fired.

At the very least, any CEO worth his/her salt should assign the task of meeting you to a key executive responsible directly to the CEO. . . . . . .with a requirement that he addresses all your issues and makes a recommendation (one way or another) to the CEO within 60 days.

Philip Wollen

Click here to hear Philip’s fiery 10-minute speech from down under—the best 10-minute summary of our international food/health/sustainability dilemma that I have ever heard.

The Bottom Line. Eventually, some of our nation’s most enlightened CEOs will embrace the 4Leaf Corporate Wellness Solution. Soon, they will begin to reap staggering savings in healthcare expenditures AND the improved productivity of a healthier workforce.

Ultimately those CEOs who don’t choose to truly promote health in the workplace will no longer be able to compete with those who do. In recent weeks, I have sent similar letters to the CEOs of CostCoWalmart and CVS respectively. I will continue reaching out to prominent corporate leaders until I find one who is ready to show America how to FIX healthcare while adding hundreds of millions of dollars to his/her bottom line.

Send this blog to the CEOs of corporations where you are a shareholder. Ultimately, they work for you. Please ask them to give me a call at 917-399-9700 or email me: jmorrishicks@me.com

The primary image on the 2013 Kroger Sustainability Report.

The primary image on the 2013 Kroger Sustainability Report.

Handy 4-piece take-charge-of-your-health kit—from Amazon.com

Want to find out how healthy your family is eating? Take our free 4Leaf Survey. It takes less than five minutes and you can score it yourself. After taking the survey, please give me your feedback as it will be helpful in the development of our future 4Leaf app for smartphones. Send feedback to jmorrishicks@me.com

International. We’re now reaching people in over 100 countries. Follow us on Facebook and Twitter or get daily blog notices by “following” us in the top of the right-hand column. For occasional updates, join our periodic mailing list.

To order more of my favorite books—visit our online BookStore now

J. Morris Hicks, working daily to promote health, hope and harmony on planet Earth.

For help in your own quest to take charge of your health, you might find some useful information at our 4Leaf page or some great recipes at Lisa’s 4Leaf Kitchen.

Got a question? Let me hear from you at jmorrishicks@me.com. Or give me a call on my cell at 917-399-9700.

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—J. Morris Hicks, board member, T. Colin Campbell Foundation

About J. Morris Hicks

A former strategic management consultant and senior corporate executive with Ralph Lauren in New York, J. Morris Hicks has always focused on the "big picture" when analyzing any issue. In 2002, after becoming curious about our "optimal diet," he began a study of what we eat from a global perspective ---- discovering many startling issues and opportunities along the way. In addition to an MBA and a BS in Industrial Engineering, he holds a certificate in plant-based nutrition from the T. Colin Campbell Center for Nutrition Studies, where he has also been a member of the board of directors since 2012. Having concluded that our food choices hold the key to the sustainability of our civilization, he has made this his #1 priority---exploring all avenues for influencing humans everywhere to move back to the natural plant-based diet for our species.
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2 Responses to Kroger spending more than one billion on healthcare

  1. ######################
    1) iDoctor-SmartphoneFutureMedicine

    Did you see this back in February?

    A response:

    gingerwest3
    1 month ago

    I started working in the Health Insurance industry almost 40 years sgo. Spent a “lifetime” trying to teach people how to be more prudent consumers of health care. Bravo to Dr. Topol! He’s a man after my own heart. My mother lived to be 93. Had one pap smear, one mammogram in her lifetime “didn’t like it, never had another” she bragged. Eat properly, exercise (she was QUEEN of exercise – we have a picture of her jumping on a trampoline at 80! STAY AWAY FROM DOCTORS – THEY MAKE YOU SICK!

    ######################

  2. Leo S. says:

    Another excellent article showing how improvements may be made for employees of large companies which could help reduce health costs for all involved. If we wait for CEOs and legislators to implement changes it may be a long time for that to happen. We don’t have to wait for legislators or CEOs to show us the way or ask for more money, which will come from us, to develop more programs. We vote every time we eat or buy something. If we stop buying a product or processed food it will no longer be made if there is no profit to be had. We as individuals should take advantage of the many articles/videos you have made available over the years and continue to do so. They speak of green businesses, products, and lifestyles. We should consider becoming green individuals by the choices we make. It seems we are always looking for others to make changes so we can begin being “normal” and do what everyone else does. We can’t wait for everyone else to change, even though we wish they would for the benefit of themselves, the environment and the planet. Throwing money at problems does not help if the causes are not removed. The stores sell what people want. The people have to learn what would be better for them to consume. Anything can be made tasty but it might not be what the cells need and may also be toxic to them.

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