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Dillons

Dillons is an American regional supermarket chain headquartered in Hutchinson, Kansas, operating as a division of The Kroger Company and specializing in grocery retail with integrated pharmacy services across Kansas, Missouri, and Nebraska.^[1]^[2] Tracing its origins to a 1913 cash-and-carry grocery market founded by J.S. Dillon in Hutchinson, with formal incorporation in 1921, the company originated from his earlier ventures selling groceries from a general store in Sterling, Kansas, during the 1890s, emphasizing affordable and convenient food access for families. The division also operates under the Gerbes and Baker's banners.^[3]^[4] Under Kroger's ownership since its acquisition of Dillon Companies in 1983 through a stock merger, Dillons has expanded to approximately 80 supermarkets as of 2025, maintaining its regional focus while benefiting from Kroger's national supply chain and private-label brands like Simple Truth.^[5]^[6] The chain is known for its community-oriented approach, including digital coupons, online ordering, and pharmacy offerings, with a legacy of innovation in self-service grocery models that influenced modern retail practices.^[7]^[8]

Overview

Corporate Structure and Ownership

Dillons operates as a wholly owned division of The Kroger Co., established following the 1983 merger between Kroger and Dillon Companies Inc., which integrated Dillons into Kroger's national network of supermarket operations.^[9] As part of this structure, the Dillon Stores Division functions autonomously within Kroger's decentralized model, managing day-to-day operations while adhering to corporate-wide policies on supply chain, merchandising, and customer service.^[10] The Dillon Stores Division oversees several regional banners, including Dillons supermarkets, Baker's in Nebraska, and Gerbes Super Markets in Missouri, allowing for localized branding and market adaptation under Kroger's unified governance.^[11] This divisional role emphasizes operational efficiency across approximately 80 stores and 11,500 associates as of 2020, contributing to Kroger's broader portfolio as the largest U.S. supermarket operator by revenue.^[11] Leadership within the Dillon lineage has historically bridged the family-owned origins and Kroger's corporate framework, exemplified by David B. Dillon, a great-grandson of founder J.S. Dillon, who rose through the ranks to serve as Kroger's president and chief operating officer before becoming CEO from 2003 to 2013 and chairman until 2014.^[12] Under Kroger's corporate governance, the division reports to senior vice presidents overseeing multiple regions, ensuring alignment with company-wide strategic initiatives while maintaining regional autonomy.^[10] The division's headquarters remains in Hutchinson, Kansas, at 2700 E. 4th Street, serving as the administrative hub for strategic planning, human resources, and distribution coordination for its banners.^[10] This location underscores the division's roots in the Kansas community, even as it integrates into Kroger's Cincinnati-based corporate oversight.^[9]

Geographic Footprint and Store Count

Dillons operates 63 grocery stores exclusively within Kansas, making it the primary banner for the state's Dillon Stores Division under Kroger ownership.^[13] These locations are concentrated in key urban and suburban markets, with the highest density in Wichita, where 15 stores serve the metropolitan area.^[14] Significant presences also exist in Topeka and Lawrence, supporting local communities through established neighborhood formats.^[6] In 2025, Dillons expanded its footprint with the opening of a new store at 2205 Iowa Street in Lawrence, adjacent to the University of Kansas west campus as part of The Crossing at KU development.^[15] This 86,000-square-foot facility, which opened on October 17, replaces a smaller predecessor and represents a $30 million investment in modern retail space.^[16] Additionally, Dillons announced plans for a $40 million Dillons Marketplace in Olathe, marking its return to the Kansas City metropolitan area after an absence since selling seven stores there in prior years.^[17]^[18] The Olathe site, at the corner of College Avenue and Sunnybrook Boulevard, is slated for construction as the flagship of broader regional reentry efforts.^[19] The broader Dillon Stores Division, encompassing Dillons alongside Gerbes Super Markets in Missouri (six locations) and Baker's Supermarkets in Nebraska (11 locations), totals 80 stores across three states, though Dillons remains focused on Kansas-specific operations.^[6]^[20]^[21]

History

Founding by J.S. Dillon

John S. Dillon, son of a Presbyterian preacher and a carpenter by trade, began his career in the late 19th century by operating a wagon and buggy repair shop in Sterling, Kansas, during the 1890s. Drawing lessons from managing a general store there—where he observed the inefficiencies of credit sales and home deliveries—Dillon entered the grocery business with innovative ideas aimed at efficiency and affordability. Motivated by the need to provide quality food for his own large family of twelve, he sought to extend the same benefits to customers through a streamlined model.^[22]^[23]^[24] In 1913, Dillon opened his first dedicated grocery store, the J.S. Dillon Cash Food Market, in Hutchinson, Kansas, introducing a pioneering cash-and-carry system that eliminated credit and delivery to reduce overhead and pass savings to shoppers. This approach emphasized high-quality products at lower prices but encountered early challenges, as customers accustomed to traditional credit-based operations were slow to adapt, leading to initial struggles in building patronage. By 1915, Dillon expanded with a second Hutchinson store, managed by his son Ray E. Dillon, further refining the cash-only model despite ongoing resistance. Earlier experiments, such as a cash grocery in Newton, Kansas, from 1910 to 1916, had tested these concepts but shifted focus back to Hutchinson amid growing operations there.^[22]^[3]^[25] The company's trajectory was interrupted by World War I, when sons Ray and Clyde enlisted in 1918, prompting Dillon to sell his business interests temporarily to partners. Upon their return in 1919, the family reestablished the venture as J.S. Dillon and Sons Store Co. in Hutchinson, signaling deeper family involvement in operations. The formal founding of Dillons occurred on May 13, 1921, with the incorporation of J.S. Dillon & Sons Stores Company, Inc., and the opening of the first official store under the Dillon banner at 200 N. Main Street in Newton, Kansas. This location embodied the core principles of quality goods, affordability, and customer-focused service through the cash-and-carry format, laying the groundwork for future growth.^[3]^[22]^[25]

Early Expansion and Family Involvement

Following the incorporation of J.S. Dillon and Sons Stores Company in 1921, the business expanded steadily in central Kansas, reaching 10 stores by 1930 through a focus on cash-and-carry operations emphasizing cleanliness and customer service.^[5] Despite the Great Depression, the company grew to 24 stores by the end of the 1930s via organic development and smaller acquisitions of local grocers, introducing innovations such as public restrooms and off-street parking to attract families.^[22] In the 1940s, under the leadership of founder John S. Dillon's sons Ray and Clyde, the chain began converting traditional stores to self-service formats, adding centralized bakeries to enhance efficiency and product freshness.^[5] After John S. Dillon's death in 1957, his sons Ray E. Dillon and Clyde Dillon—along with Clyde's son Paul—assumed key roles in guiding the company's transition to modern supermarkets during the late 1950s.^[22] This period marked accelerated growth through strategic acquisitions, including the 1957 purchase of Kroger's Wichita Division, which added 16 stores, and the integration of the small regional King Sooper chain, bringing the total to 40 supermarkets across 20 Kansas towns by the late 1950s.^[5] The company's expansion continued into the 1960s, solidifying its position as a regional leader.^[22] The company's momentum continued into the 1960s with its 1967 incorporation as Dillon Companies Inc., enabling further diversification beyond traditional groceries.^[5] Under family oversight, including Ray E. Dillon Jr. as a rising executive, Dillon expanded into convenience stores with the launch of the Kwik Shop banner in the early 1970s and entered the drugstore sector, acquiring chains to offer integrated health and pharmacy services.^[22] By the 1970s, these efforts resulted in regional dominance in Kansas and surrounding states, with over 200 supermarkets and more than 50 Kwik Shop locations, reflecting the family's emphasis on multi-format retail to meet evolving consumer needs.^[5]

Acquisition by Kroger and Modern Developments

In 1983, The Kroger Company acquired Dillon Companies, Inc., in a stock-for-stock merger valued at up to $750 million, which expanded Kroger's operations from its traditional Midwest and East Coast footprint to a coast-to-coast network by incorporating Dillon's 219 supermarkets and 350 convenience stores primarily in the western United States.^[26]^[27] The transaction, approved by shareholders in January 1983, integrated Dillon as a division under Kroger while retaining the Dillons banner for its Kansas-based stores.^[27] This merger marked a pivotal moment in Kroger's growth strategy, leveraging Dillon's regional strength to achieve nationwide scale.^[28] Following the acquisition, Dillons underwent operational integrations, including the introduction of customer loyalty programs and technological enhancements in the 1990s and 2000s as part of Kroger's broader efficiency initiatives. In 1999, Dillons launched its Plus Card loyalty program, which provided savings and fuel rewards, enhancing customer retention amid competitive pressures.^[3] Kroger invested heavily in technology during this period, spending $120 million from 1992 to 1994 on improvements like supply chain management and store operations, which benefited Dillons stores by modernizing inventory and checkout systems.^[29] David B. Dillon, a great-grandson of Dillons founder J.S. Dillon, rose through Kroger's ranks and became CEO in 2003, leading the company until 2013 and overseeing continued synergies across banners.^[12] In 2021, Dillons marked its centennial since the 1921 founding with year-long celebrations, including promotions and community recognitions to honor its legacy under Kroger ownership.^[24] In recent years, Dillons has pursued targeted expansions while navigating market challenges, demonstrating stability within Kroger. The chain returned to the Kansas City metropolitan area in 2025 with plans for a new Dillons Marketplace store at the Olathe Marketplace development, a $40 million project aimed at reestablishing presence after exiting the region in 2008 due to underperformance.^[17] On October 17, 2025, Dillons opened a $30 million replacement store at 2205 Iowa Street in Lawrence, Kansas, featuring expanded amenities and over 150 new jobs as part of the Crossing at KU development.^[15] Community initiatives, such as a 10% discount for veterans and active military on Veterans Day 2025 (November 11), underscore ongoing engagement efforts.^[30] Despite challenges like the closure of four Dillons stores in Springfield, Missouri, in recent years due to low sales and Kroger's broader plan to shutter 60 underperforming locations nationwide by mid-2026 (none of which affect Dillons), the banner has maintained operational stability with approximately 65 stores across Kansas and Missouri.^[31]^[32]^[33]

Operations

Store Formats and Product Offerings

Dillons operates primarily in two main store formats: traditional supermarkets and larger Dillons Marketplace locations. Traditional Dillons supermarkets typically averaging around 50,000 square feet, with sizes varying based on location, and feature a combination of grocery, general merchandise, and pharmacy services designed for everyday shopping needs.^[34] These stores emphasize a balanced layout with dedicated sections for fresh groceries and household essentials, catering to local communities in Kansas. In contrast, Dillons Marketplace stores are expansive hybrid formats, often exceeding 100,000 square feet—such as the 110,000-square-foot prototype opened in 2006 or the 124,000-square-foot remodeled location in Wichita—and integrate additional amenities like expanded general merchandise without apparel departments.^[35]^[36] Recent developments include the opening of an 86,000-square-foot store in Lawrence, Kansas, in October 2025, and plans for a new Marketplace store in Olathe, Kansas, announced the same month.^[16]^[37] This format supports one-stop shopping by combining supermarket elements with enhanced services, including on-site fuel centers at select sites.^[38] The core product offerings at Dillons centers on a wide array of fresh and packaged groceries, with a strong focus on Kroger's private label brands to provide affordable, high-quality options. Key private labels include Simple Truth for organic and natural products, Private Selection for premium gourmet items, and the foundational Kroger Brand for everyday staples, encompassing over 10,000 exclusive items across categories like pantry goods, beverages, and snacks.^[39] Fresh departments highlight seasonal produce, in-house butchered meats and seafood, full-service bakeries offering custom cakes and breads, and floral arrangements for occasions. Dillons particularly emphasizes locally sourced Kansas products, such as regional beef from area farms, to support community agriculture and appeal to shoppers seeking fresh, regional flavors.^[40] Integrated pharmacy services enhance the health and wellness focus of Dillons stores, with on-site pharmacists providing prescription filling, vaccinations, health screenings, and personalized care consultations at most locations.^[41] These services extend to wellness programs promoting preventive health, including over-the-counter medications and baby care products within dedicated health and beauty aisles. Select Dillons Marketplace and traditional stores feature adjacent fuel centers, where customers can redeem points earned from grocery purchases—such as 1 point per dollar spent on most items or 25 points per qualifying prescription—for discounts on fuel or future shopping.^[42] As of late 2025, Dillons operates 48 such fuel centers across its footprint, tying convenience services directly to core grocery rewards.^[43]

Customer Services and Innovations

Dillons provides a range of digital platforms to enhance customer convenience and savings. The Dillons mobile app allows users to access exclusive digital coupons, view weekly ads, and receive personalized deals, enabling shoppers to save on groceries directly from their devices.^[44]^[45] Additionally, the app supports scan-and-go checkout through Kroger's Scan, Bag, Go technology, which lets customers scan items with handheld devices while shopping and bypass traditional lines.^[46]^[47] For delivery and pickup options, Dillons partners with Instacart to offer same-day grocery delivery, with orders fulfilled in as little as one hour from local stores.^[48] The Boost service provides free delivery for members on qualifying orders, while the pickup program—formerly known as ClickList—allows customers to order online and collect items curbside without entering the store, with savings like $20 off first orders over $75.^[49]^[50] The loyalty program, branded as Kroger Plus, rewards customers with points earned at a rate of one per dollar spent on qualifying purchases, which can be redeemed for fuel discounts up to $1 per gallon at Kroger fuel centers or as cash off future shopping.^[43]^[51] Personalized deals are tailored via the app based on shopping history, further integrating with digital coupons for targeted savings.^[52] Among recent innovations, Dillons has implemented self-checkout kiosks across stores to streamline the payment process and reduce wait times.^[53] In 2025, the company introduced AI-powered tools through its expanded Instacart partnership, including the Cart Assistant feature in the iOS app to assist with shopping lists and recommendations.^[54]^[55] Sustainability efforts include reusable bag programs as part of Kroger's Zero Hunger | Zero Waste initiative, promoting the use of reusable totes to phase out single-use plastics since the early 2020s.^[56]^[57] The app also facilitates prescription refills at Dillons pharmacies for added convenience.^[44]

Gerbes Super Markets

Gerbes Super Markets is a regional supermarket chain operating as a sister banner under the Dillon Companies division of The Kroger Company, sharing ownership and operational synergies with other division brands. The chain was founded in 1933 by Frank J. Gerbes as a general store in Tipton, Missouri, reflecting the founder's rural Midwest roots near Jefferson City.^[58] In the following decades, Gerbes expanded from its initial general store format to multiple supermarkets, with notable growth in central Missouri during the 1960s, including openings in Columbia in 1961 and the first Gerbes Family Center—a combined supermarket and discount store—in Jefferson City in 1965.^[58] In 1966, Gerbes merged with Dillon Companies, Inc., integrating as a subsidiary while retaining its regional identity; this structure persisted after Kroger's acquisition of Dillon in 1983.^[59]^[26] Currently, Gerbes operates six stores across central Missouri, with locations in Columbia, Jefferson City, Camdenton, and Eldon, on a smaller scale compared to the broader Dillon division.^[20] The banner maintains a focus on its Midwest family-owned heritage, emphasizing fresh meats such as locally sourced beef and guaranteed-fresh local produce to meet community preferences.^[60]^[61] Stores feature Kroger-aligned branding with regional adaptations, including in-house pharmacies and fuel centers at select sites, alongside standard grocery, household, and ready-to-eat offerings.^[62]^[20]

Baker's Supermarkets

Baker's Supermarkets was founded in 1927 by Abe Baker, a Russian immigrant, starting as a small grocery store in Walnut, Iowa, before expanding to its first Nebraska store in Bellevue in 1947 and developing into a family-operated chain based in Omaha.^[63]^[64] The business remained under family control, led by Abe and his sons Robert and Jack, until 1992, when it was sold to Fleming Companies amid growing competitive pressures in the regional grocery market. In 2001, The Kroger Co. acquired Baker's from Fleming Companies, purchasing 15 Baker's locations and one Food 4 Less store primarily in the Omaha area, marking Kroger's entry into the Nebraska market.^[65] The chain was integrated into Kroger's Dillon Stores Division, headquartered in Hutchinson, Kansas, allowing it to retain its local banner while benefiting from corporate resources.^[66] As of 2025, Baker's operates 11 stores across eastern Nebraska, including in Omaha, Bellevue, and Fremont, focusing on the metropolitan Omaha region and nearby communities like Lincoln.^[67] Baker's emphasizes strong community ties in Nebraska, partnering with local organizations such as the Food Bank for the Heartland on initiatives like the annual Shine the Light on Hunger holiday food drive.^[68] Its stores offer full-service grocery selections, including fresh produce, bakery items prepared in-house, and pharmacies for health needs, alongside household essentials and ready-to-eat meals.^[21] Following integration, Baker's adopted Kroger's customer rewards program, enabling loyalty benefits like digital coupons and fuel points, as well as access to Kroger's private-label brands such as Simple Truth for organic and affordable options.^[69] In its modern role within the Dillon Stores Division, Baker's maintains its regional branding to preserve Nebraska heritage while aligning with division-wide standards for supply chain efficiency and digital services.^[66] The chain has pursued limited growth, with plans announced in 2025 for two new stores in the Elkhorn area of Omaha to meet local demand without altering its community-focused identity; these stores are expected to open in 2026.^[70]^[71]

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