Kroger reports 'solid' Q1 results driven by fresh, digital strategy – The Packer
A focus on fresh, affordable food and an enhanced digital strategy has proven a successful combination, says The Kroger Co., which reported its first quarter 2023 results without fuel on June 15.
“Kroger achieved solid first quarter results guided by the execution of our ‘Leading with Fresh and Accelerating with Digital’ strategy,” CEO Rodney McMullen said in the release. “As more customers are feeling the effects of inflation and economic uncertainty, we are growing customer households by providing fresher products at affordable prices with personalized rewards.
“Our amazing associates are bringing this strategy to life every day by delivering a full, fresh and friendly shopping experience with zero compromise on quality, selection and convenience,” he added.
The Cincinnati-based grocer reported total company sales of $45.2 billion in the first quarter, compared to $44.6 billion for the same period last year. Excluding fuel, sales increased 3.5% compared with the same period last year.
Gross margin was 22.3% of sales for the first quarter. The FIFO (First in, First Out) gross margin rate, excluding fuel, increased 21 basis points compared to the same period last year. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for customers, the company said.
Kroger primarily attributes the improvement in the FIFO gross margin rate, excluding fuel, to the performance of its Our Brands, sourcing benefits, lower supply chain costs and the effect of its terminated agreement with Express Scripts, partially offset by higher shrink and increased promotional price investments.
“Kroger’s first quarter results demonstrate the durability of our business model in a more challenged operating environment,” Kroger Chief Financial Officer Gary Millerchip said in the release. “The investments we have made over recent years to deliver for our customers and strengthen our value creation flywheel give us the confidence to reaffirm our full-year identical sales without fuel and adjusted net earnings per diluted share guidance. We delivered strong Adjusted Free Cash Flow in the quarter and as a result of improvements in working capital, we are raising our guidance to a range of $2.5 [billion] to $2.7 billion for the fiscal year 2023.”
What does “Leading with Fresh” mean to Kroger?
The grocer says it accelerated its Fresh Produce Initiative, designed to deliver fresher food to shoppers and keep perishables on the shelf longer, with a total of 1,738 stores now certified, driving higher identical sales without fuel in certified stores, the company said.
Kroger also reports increasing “alternative farming offerings” to 1,094 stores, which it says has increased shopper access to locally sourced fresh products.
An expanded on-demand floral and sushi delivery to the Uber Eats marketplace, has further extended its fresh footprint, according to the release.
On the fresh and affordable front, Kroger has consistently promoted fresh produce and other fresh foods at competitive prices during key holidays.
Related: Kroger takes on Walmart in battle for lowest-priced Easter menu
Related: Kroger delivers Mother’s Day brunch for $2 a serving
Related: Kroger Delivery offers Father’s Day meal ideas for $7 a person
Kroger says its digital sales grew 15% in the first quarter of 2023. It also increased digitally engaged households by 13% over last year.
A continued focus on its delivery solutions, including Kroger Boost and its customer fulfillment centers, resulted in increased delivery sales of 30% over last year, the company said.
In its first quarter results ending May 20, 2023, Kroger also highlighted its sustainability initiatives including:
“Looking forward, Kroger’s go-to-market strategy positions us well in a wide range of economic environments to continue to deliver for our customers, invest in our associates and achieve sustainable and attractive returns for shareholders,” McMullen said.
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© 1995 – 2024 Farm Journal, Inc. All RightsReserved. This material may not be published, broadcast, rewritten,or redistributed.
All market data delayed 10 minutes.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
“Kroger achieved solid first quarter results guided by the execution of our ‘Leading with Fresh and Accelerating with Digital’ strategy,” CEO Rodney McMullen said in the release. “As more customers are feeling the effects of inflation and economic uncertainty, we are growing customer households by providing fresher products at affordable prices with personalized rewards.
“Our amazing associates are bringing this strategy to life every day by delivering a full, fresh and friendly shopping experience with zero compromise on quality, selection and convenience,” he added.
The Cincinnati-based grocer reported total company sales of $45.2 billion in the first quarter, compared to $44.6 billion for the same period last year. Excluding fuel, sales increased 3.5% compared with the same period last year.
Gross margin was 22.3% of sales for the first quarter. The FIFO (First in, First Out) gross margin rate, excluding fuel, increased 21 basis points compared to the same period last year. This increase in rate was achieved while also investing in price to maintain a competitive price position and deliver greater value for customers, the company said.
Kroger primarily attributes the improvement in the FIFO gross margin rate, excluding fuel, to the performance of its Our Brands, sourcing benefits, lower supply chain costs and the effect of its terminated agreement with Express Scripts, partially offset by higher shrink and increased promotional price investments.
“Kroger’s first quarter results demonstrate the durability of our business model in a more challenged operating environment,” Kroger Chief Financial Officer Gary Millerchip said in the release. “The investments we have made over recent years to deliver for our customers and strengthen our value creation flywheel give us the confidence to reaffirm our full-year identical sales without fuel and adjusted net earnings per diluted share guidance. We delivered strong Adjusted Free Cash Flow in the quarter and as a result of improvements in working capital, we are raising our guidance to a range of $2.5 [billion] to $2.7 billion for the fiscal year 2023.”
What does “Leading with Fresh” mean to Kroger?
The grocer says it accelerated its Fresh Produce Initiative, designed to deliver fresher food to shoppers and keep perishables on the shelf longer, with a total of 1,738 stores now certified, driving higher identical sales without fuel in certified stores, the company said.
Kroger also reports increasing “alternative farming offerings” to 1,094 stores, which it says has increased shopper access to locally sourced fresh products.
An expanded on-demand floral and sushi delivery to the Uber Eats marketplace, has further extended its fresh footprint, according to the release.
On the fresh and affordable front, Kroger has consistently promoted fresh produce and other fresh foods at competitive prices during key holidays.
Related: Kroger takes on Walmart in battle for lowest-priced Easter menu
Related: Kroger delivers Mother’s Day brunch for $2 a serving
Related: Kroger Delivery offers Father’s Day meal ideas for $7 a person
Kroger says its digital sales grew 15% in the first quarter of 2023. It also increased digitally engaged households by 13% over last year.
A continued focus on its delivery solutions, including Kroger Boost and its customer fulfillment centers, resulted in increased delivery sales of 30% over last year, the company said.
In its first quarter results ending May 20, 2023, Kroger also highlighted its sustainability initiatives including:
“Looking forward, Kroger’s go-to-market strategy positions us well in a wide range of economic environments to continue to deliver for our customers, invest in our associates and achieve sustainable and attractive returns for shareholders,” McMullen said.
From yield forecasting to plant and weed identification, experts say the future is endless for the integration of artificial intelligence.
The organization that represents Florida tomato growers says the tomato suspension agreements are ineffective and that dumping still continues.
Despite supply challenges, the mango market continues to grow, says Dan Spellman, director of marketing for the National Mango Board.
It’s no surprise that the education session on the tomato suspension agreement at this year's Viva Fresh Expo was a packed house, given the extensive discussion recently over its future.
The company says its process uses vaporized hydrogen peroxide, ozone and ultraviolet light to eliminate up to 99.99% of pathogens, addressing global food safety challenges across industries.
The move will expand the Grubhub Marketplace to include over 950 independent grocery stores nationwide.
© 1995 – 2024 Farm Journal, Inc. All RightsReserved. This material may not be published, broadcast, rewritten,or redistributed.
All market data delayed 10 minutes. This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
