The Kroger Co. Chairman and CEO Rodney McMullen took the stage in Las Vegas at Groceryshop, a leading U.S. event for the retail, grocery, and consumer packaged goods industries, for its annual conference during the opening keynote themed Kroger Delivers the Future of Grocery Shopping Now.
McMullen shared the company’s continued focus on leading with fresh and accelerating with digital by leveraging its complementary assets to create innovative solutions for customers, a continually improving workplace for associates, and a more sustainable operation for the planet.
“Kroger’s ability to proactively and strategically leverage our assets has positioned us to lead and thrive,” said McMullen. “Our relentless focus on serving our customers, uplifting our associates, and living our purpose to feed the human spirit has guided us through the many unknowns of COVID-19 and these principles will continue to shape our culture and operations as we continue to transform and capitalize on the momentum we’re experiencing.”
“Groceryshop is honored to have industry giants like Kroger join us for this year’s conference,” said Krystina Gustafson, senior vice president of content for Shoptalk and former CNBC retail reporter, who interviewed McMullen for the keynote conversation. “The sector has evolved immensely in the past 18 months, and Rodney McMullen’s perspective emphasized just how much consumer behavior has changed and how retailers are responding and evolving to meet new expectations.”
McMullen shared the following five insights at Groceryshop:
1. The Customer is Going to Win
In today’s highly competitive and dynamic grocery retail environment, the customer is going to win. Kroger continues to expand and enhance its seamless ecosystem to create a model where customers will not have to compromise on freshness, quality, selection, pricing, convenience, or speed – no matter if they want groceries now or tomorrow or want to shop in-store or online. Kroger doubled its digital business in 2020 and has committed to doubling its digital business again and profitability by the end of 2023. Kroger’s digital business continues to grow, as does Kroger Precision Marketing, its retail media business. McMullen emphasized the company currently has nearly 11 million daily retail customers and four million daily online customers.
2. Think Food. Think Kroger.
Kroger understands customers’ meal and food needs shift by day, week, and even hour… and surely by occasion. To solve for this, the company is continually innovating and scaling its industry-leading assets, including associates, stores, supply chain, fulfillment network, fleet, technology systems, and data and insights, as well as strategic partners, all to advance its seamless ecosystem that combines traditional shopping solutions with strategic innovation. As an example, last week Kroger introduced Kroger Delivery Now in collaboration with Instacart. The 30-minute delivery solution complements Kroger’s existing assets by leveraging the retailer’s network of stores and Instacart’s on-demand fulfillment network to provide customers what they want when they need it. The new offering meets the customer need for immediacy without compromising on freshness, selection, value, experience, and speed, a retail industry first.
3. Kroger Enhances the Associate Experience
Kroger continues to invest in its nearly half a million associates who have done an extraordinary job leading and operating stores, e-commerce operations, pharmacies, supply chains, and manufacturing facilities through the COVID-19 public health crisis. Kroger’s proactive approach to uplifting associates over recent years is helping the company navigate the challenging labor market. McMullen remarked that the company entered 2021 by planning to invest $350 million in hourly wage increases for associates this year, in addition to the $800 million the company invested in wages between 2018 and 2020. The company’s average hourly wage is now more than $16 an hour and with comprehensive benefits factored in, the wage will be approaching $21 by the end of 2021. McMullen commented 70% of current store leaders began as an hourly associate, emphasizing Kroger is a place where you can come from a job and stay for a career. He also highlighted associate benefits like the company’s education assistance program that provides up to $21,000 for both part-time and full-time associates – over the course of their career – and covers a GED to PhD. Kroger is currently hiring for more than 20,000 positions in advance of the holiday season and will host a nationwide hiring event on October 13 to recruit for store, e-commerce, corporate, manufacturing, logistics, and pharmacy talent. Kroger invites individuals to apply at jobs.kroger.com.
4. Kroger Celebrates Four-Year Anniversary of Zero Hunger | Zero Waste
Through Kroger’s Zero Hunger | Zero Waste social and environmental impact plan—the centerpiece of the company’s environmental, social, and governance strategy—the company continues to break down barriers to food access and capture the full value of food produced across the U.S. food system. Through the plan, Kroger is committed to creating communities free of hunger and waste by inspiring associates and customers, investing resources, and activating partnerships. Over the past four years, Kroger has donated 1.8 billion meals to communities – 641 million meals in 2020 alone – provided $1.2 billion in charitable giving, and drove a 20% reduction in retail food waste generated. During the conversation, McMullen announced a special donation of 10 meals on behalf of every attendee at Groceryshop, totaling 25,000 meals to Three Square, Southern Nevada’s only food bank and the area’s largest hunger-relief organization.
5. Kroger Looks Ahead to What’s Next
Kroger’s vision is to serve America through food inspiration and uplift, and it remains focused on where its customers, as well as broader food market, will be in 10 years. Through its growing seamless ecosystem, the company will continue to expand its reach and enter additional new geographies by leveraging assets like Kroger Delivery customer fulfillment centers. McMullen shared the new Kroger Delivery operation in Florida has ramped up faster than expected, unlocking additional ways of executing and operating and resulting in high customer repeat rates and net promoter scores.
He also predicts there will be a sustained trend of customers choosing to cook at home versus restaurant dining because it presents a way to better stretch food dollars, eat healthier, and prepare household favorites as well as new recipes.
