Restock Kroger having positive effect

Keshia Beadle
Senior Retail Analyst

Date : 06 December 2019

As Kroger reports Q3 sales growth, the effects of its Restock Kroger plan are starting to shine through.

A successful framework

Now in the second year of its three year plan, Restock Kroger has helped to reposition the business for today and for the future. Same store sales (excl fuel) were up 2.5% this quarter, the strongest growth since the start of the Restock Kroger plan, however gross margins and profit remain under pressure.  Turnover for the quarter was $28bn and digital sales grew by 21%. There are now a total of 1,915 pickup locations and 2,326 delivery locations, meaning more than 96% of Kroger households now have access to these services. The retailer has also been able to reduce its total debt significantly during this time.

Launch of new branding

During the last quarter, Kroger launched its new logo and branding, with the tagline 'Fresh for Everyone'. It also announced Wisconsin as the location for its sixth Kroger-Ocado customer fulfillment centre (CFC). Its private label brands continued to perform strongly, with sales up 3.4% compared to last year. A total of 231 new private label products were introduced, including a plant based range in response to the growing demand from shoppers in this area.

Future proofing

As part of its work to prepare the business for the future, Kroger continues to build its alternative revenue streams, looking ahead for long-term growth. These alternative profit streams are on track to contribute an incremental $100m in 2019 compared to 2018. After reviewing its portfolio, Kroger announced it will divest its stake in Lucky's Market, a speciality grocery chain it acquired in 2016. This shows the retailers commitment to focusing its investments in the areas in which it believes it is best positioned to succeed.

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