Kroger Slows Down Pace Of Store Refurbishments


After attempting to renovate too many locations and sell too many new products at once, Kroger Co. is going back to the basics of grocery retail. The U.S. supermarket company is intending to refresh stores at a slower clip to keep more locations fully operational, The Wall Street Journal reported.

Kroger initiated its plan to revitalize its business following over 10 years of same-store sales growth that concluded in 2017. According to that plan the company would, over three years, invest in technology with the inclusion of complex ways to mine shopper information and refresh stores. It said the project would make $400 million of operating profit by next year.

The grocer has since renovated approximately 20 percent of its 2,700 locations with its plan for “Restock Kroger.” The profit rise, however, hasn’t reportedly come to fruition. In September, the company pulled its 2020 profit guidance. And its shares have fallen almost 40 percent since their late 2015 peak.

Kroger laid off close to a thousand managers and other employees to reduce costs last month. Some operational changes as well as a new marketing campaign are intended to put the focus on driving sales of groceries, which make about three-quarters of the retailer’s sales. Chief Executive Rodney McMullen said, according to the outlet, “It took us too long to do it. We put too many things on our stores to execute.”

Kroger’s retail transformation, however, was front and center at its analyst day, while the firm aims to remake its business with its Restock Kroger framework. McMullen said during the Nov. 5 meeting that “Restock Kroger is repositioning our business by widening and deepening our competitive moats” in four main areas. The first area is redefining the grocery environment, enhancing the customer connection by creating an experience that is seamless, simple, easy and intuitive.

McMullen noted that the grocer is “using our data to drive personalization.” The company’s brick-and-mortar locations are viewed as a competitive advantage, as winning is defined by owning the customer relationship through the complete seamless ecosystem.


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