Kroger Continues to Soar with its Fresh & Digital Growth Strategy

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Strong Q3 Performance and Customer-Centric Approach

Kroger announced strong results in the third quarter of 2022, driven by the “Leading with Fresh and Accelerating with Digital” strategy. With no compromise on quality, selection, or convenience, Kroger continues to provide a seamless customer experience by delivering fresh and affordable food whenever and wherever customers need it. 

As Kroger headed into the fourth quarter, it planned to constantly provide its customers with a full, fresh, and welcoming experience all through the busy holiday season. Now as inflation plagues the minds of the customers, Kroger is laser-focused on providing its customers fresh and affordable food. Customers are engaging more with Kroger’s Our Brands' products, and are downloading and using digital coupons. The majority of Kroger's sales volume is driven by considerable loyal household growth in addition to ongoing overall household growth.  

Leveraging Data Science for Targeted Promotions

In order to create differentiated customer insights and provide targeted promotions on the goods that customers value the most, Kroger continues to employ its cutting-edge data science capabilities. Digital coupons are being downloaded thanks to this method at a rate that is 32% greater than it was the previous year. Additionally, Kroger is enhancing its Seamless offering, which provides customers with fresh products anytime and anywhere, without compromising on convenience, quality, or selection. Strong digital growth occurred in back-to-back quarters, driven by its delivery solutions.   

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Technological Advancements and Digital Growth

In this quarter, Kroger added improvements to its app that made it simpler for customers to take advantage of its savings and promotions. The company introduced its first in-app flash sales, allowing customers to clip digital offers straight from their shopping carts. All of the stores in the Kroger network now provide 3-hour pickup lead times, with some locations offering lead times as little as one hour. Kroger is making investments in digital growth initiatives, such as growing its delivery network in existing and new geographies.

Additionally, Kroger is expanding its unique membership program, Boost, which has had an incredible customer response since its nationwide rollout last year. The cornerstone for the expansion of its delivery service is this membership program, which is one of the most affordable in the industry. 

Executive Insights on Competitive Environment and Inflation

While speaking about the competitive environment and the rising inflation, Kroger’s Chairman and Chief Executive Officer, Rodney McMullen said, “All retailers are doing everything they can to minimize the impact on inflation to customers the best you can do. And we obviously would use our personalized and promotions that are directly focused on individual households because of things we know they love to try to help people stretch their budget. What we find is when customers move to Our Brands, that’s very, very sticky because of the high quality of the product and the satisfaction there. So what we find is even when things are getting normalized, Our Brands come out of that at a higher penetration level than going in, which is long-term good for our business as well.

Financial Strategy and Customer Loyalty

”Kroger’s Chief Financial Officer, Gary Millerchip further added, “As you know, our core strategy is to grow existing loyal customers and what was really pleasing in the quarter as we saw 2.5% growth in loyal customers. So we’re seeing customers move through the loyalty curve and that’s always been the strategy to really deeply reward customers and grow that relationship. I think what we are also seeing is that as we are building that seamless capability with digital, we are starting to now attract a larger number of households too and the investments we are making in digital are creating that capacity to grow households as well.”