Kroger confident about 2018 growth
It’s working. A plan called Restock Kroger is producing even better results than the company said it when it announced the broad slate of initiatives on October 11.
Identical supermarket sales excluding fuel grew 1.1% during Kroger’s third quarter ended November 4, slightly better than the 0.5% to 1% range the company said it would achieve for the remainder of 2017 when Restock Kroger was announced. Fourth quarter identical store sales are now projected to exceed 1.1%, although the company did not indicate by how much. Total sales increased 4.5% to $27.7 billion in the third quarter, but excluding fuel advanced 3%.
“Restock Kroger is off to a great start. Customers are recognizing our efforts to redefine the customer experience and rewarding us with their loyalty. We continue to accelerate our digital and e-commerce offerings, to grow Our Brands, to lower prices for customers, and to invest in our associates,” said Kroger Chairman and CEO Rodney McMullen.
The holidays are Kroger’s time to shine, according to McMullen, noting that the company’s Fred Meyer division had record sales for Black Friday.
“This quarter shows that by investing for the future, our business continues to improve and gain momentum. We remain confident in our ability to continue to grow identical supermarket store sales and market share for the balance of the year and in 2018.”
Profits during the quarter increased to $397 million, or 44 cents a share, compared to $391 million, or 41 cents a share, last year. The company confirmed its guidance for the 53 week fiscal year of of $1.74 to $1.79 per share and adjusted earnings per share of $2 to $2.05.
(For more details on McMullen’s vision and the Restock Kroger plan, check out the cover story in the November/December issue of Retail Leader.)
Among the initiatives undertaken during the third quarter as part of the Restock plan, Kroger highlighted the following:
- In the area of redefining the grocery customer experience, the company launched a “We Are Local” campaign, hosted its first natural foods innovation summit, opened a restaurant called Kitchen 1883 and launch new private labels in the apparel and floral category.
- With regards to partnering for customer value, Kroger said it used cost savings to lower prices, launched home delivery with Instacart in Southern California and expanded cloud computing with the Google Cloud Platform. The company also introduced the Kroger Precision Marketing, Powered by 84.51° media solution to provide CPG companies a service to deliver personalized communication to Kroger customers.
- Talent development was aided by the incremental investment of $500 million in associate development over the next three years and 14,000 part time and seasonal roles were created.
- Kroger’s live with purpose objective was furthered by the launch of the “Zero Hunger | Zero Waste” initiative with the ambitious goal of ending hunger in the communities when Kroger operates and eliminating waste across the company by 2025. The company also generated $7 million to support hurricane recovery in Texas, Florida and Puerto Rico and donated $3.2 million to the USO through its Honoring Our Heroes campaign.