Kroger CEO McMullen says Restock on track
Fourth quarter sales at Kroger increased 2.3% to $28.9 billion and full year sales grew by the same percentage to $122.3 billion The company’s identical store sales for the fourth quarter increased 2%.
“We are pleased with our 2019 results and improving trends in our supermarket business,” said Kroger chairman and CEO Rodney McMullen. “We delivered on our commitments for ID sales without fuel, adjusted FIFO operating profit, and cost savings in addition to generating over $100 million of incremental operating profit through alternative profit streams in 2019. We also delivered strong adjusted free cash flow during the year, consistent with the total shareholder return model outlined at our Investor Day.”
According to McMullen, the broad set of strategic initiatives undertaken several years ago and branded as “Restock Kroger,” is the right strategic framework to position the company for sustainable growth in the future.
“This transformational foundation supports our competitive moats today – fresh, our brands and personalization - as well as building a seamless ecosystem of the future,” McMullen said.
Among the highlights the company touted were:
- The best ever year for Kroger own brands which exceeded $23.1 billion in sales. The company introduced 39 new Our Brands Plant-Based products in 2019 and its Private Selection brand eclipsed $2 billion in sales for the first time, making it Kroger’s third $2-billion-dollar brand.
- Ominichannel expansion continued to include 1,989 Pickup locations and 2,385 Delivery locations, covering 97% of Kroger households.
- Continued investment in Kroger associate wages has increased Kroger’s average hourly wage to $15 an hour in 2019, with average hourly rate now over $20 per hour with comprehensive benefits factored in.
- Made significant investments in educational assistance program, Feed Your Future. Since inception, the program has impacted over 5,000 employees with hourly associates making up 87% of those who have taken advantage of this program so far.
- Achieved record employee retention in one of the tightest labor markets in years.