So Kroger, you've weathered a pandemic...what's next?
With over 2,800 stores under 24 different names, spanning 35 states, and annual sales exceeding $121 billion, Kroger is DEFINITELY a grocery giant. But even as a well-established grocer, Kroger, still experienced first hand the major changes that have taken place in the Food & Beverage industry during the pandemic. The questions are:
1. What have they done to address these changes?
2. And how will these decisions impact the business strategy in the future?
Well if you’re an employee, supplier, or competitor of Kroger, the answer to these questions is essential to you! Why? It should help drive how you work with, for, or against Kroger. And it just so happens that you’re in luck!
On June 17, Kroger held their 2021 Q1 Earnings Call. For those readers that don’t know, an Earnings Call is a quarterly event where a company’s senior leadership team will analyze the company’s financial performance, progress, and strategy. So, essentially, the perfect time for you to get an idea of where Kroger has been, where they’re going, and the role you can and should play in that. Here’s a breakdown of a few of the trends mentioned during the call:
FOCUS ON COOKING AT HOME AND HEALTHY FOODS CONTINUES
During the pandemic, grocery stores saw boosts in sales with more people cooking at home, eating healthier, and stocking up for longer durations in less trips. With the pandemic slowly winding down, this has started to shift. And while people are returning to making more frequent trips to the store and spending less per trip, it appears a good chunk of us are still attempting to channel our inner MasterChef, with a sustained interest in cooking at home, and eating healthy. In fact, 92% of Kroger customers surveyed say they enjoy cooking the same or more than they did pre-covid. … Please tell me I’m not the only one living off Pinterest feelin’ like my own personal Gordon Ramsay...only to wind up with something that instead of being featured on Best Chefs in America is better suited for Kitchen Nightmares? Too much Food Network for one pandemic? There’s no such thing. My house is just thankful I’m renting...save my TLC dreams for another day.
E-COMMERCE & CURBSIDE PICK-UP THRIVE
Another very real trend that elevated during the pandemic is a focus on e-commerce with online shopping and curbside pick-up. I mean, c’mon, who didn’t take advantage of that AMAZING service during the pandemic? Not that I didn’t miss trolling the grocery store aisles and wondering how this second box of cookies got into my cart...but it’s been a lifeline for many during the pandemic to minimize exposure and improve safety, and even added convenience. While Kroger may have been behind its competitors pre-pandemic, over the last year they’ve been working to improve their e-commerce presence - and the hard work has been paying off! Kroger now provides customers across the country with over 2 million spots per week to pick up what they want, when they want it. In June they also launched their delivery service in Florida, making it even easier for customers to shop.
PEOPLE MAKE A BUSINESS
While it may be easy to get caught up in all that has happened over the past year, during the call Kroger leadership really tried to highlight the importance of its team, and the fact that a company is nothing without good employees. With a culture focused on incentivizing lifelong learning, growth, and development, it seems that Kroger is trying to keep its employees happy. Throughout the call, they highlighted their industry-leading education assistance program, and the company goal to increase average hourly rate to over $16/hour. According to Kroger leadership, people join Kroger in part-time positions, and stay for careers! In fact, 70% of their store directors started as part time clerks. Hey Kroger, if you're looking for business acumen training...I know a place (wink wink).
Although this seems like a lot, it's barely scratching the surface of all that was discussed during the call. For more details on what was covered during the call, how to analyze these things, and how to make this information actionable, I encourage you to join us on Thursday, July 22 at 11 am (ET)! Acumen Learning senior financial consultant, Kelvin Brents, will be diving into the Kroger call, and giving you tips on how to listen to an earnings call, providing you with a free workbook to use in all future calls, and helping you to improve your business acumen. Visit https://www.acumenlearning.com/webinar-schedule to register.
If you want to read the call before the webinar visit:
Earnings Call Transcript: https://www.fool.com/earnings/call-transcripts/2021/06/17/kroger-kr-q1-2021-earnings-call-transcript/