Greg Foran, the former Walmart executive who joined the supermarket chain as CEO earlier this year, said in a Bloomberg News interview published Thursday (May 21) that the company is setting the stage to reduce prices across product categories.
Kroger wants to up competition with Walmart and other companies that have gained market share in recent years at the expense of traditional grocery stores, the report added.
In the food retail world, companies focused on value are outselling those seen as offering higher prices, Foran said, citing Walmart, Costco, Trader Joe’s, Aldi and Amazon.
Foran, who joined Kroger in February, added that Kroger will seek to reduce expenses by importing products directly and more effectively employing technology. From there, the company will use those savings to cut prices. Groceries throughout the store will become cheaper, the CEO added, but declined to share a price tag.
“The reality is, the basket has to come down. And not everyone’s basket is the same,” Foran said. “It needs to be across thousands of products, and it has to be something that passes the commonsense piece with customers.”
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Foran, who had served as CEO of Walmart U.S., made a similar argument during his first earnings call with Kroger in March, saying his priority is to boost top-line growth by removing inefficiencies from the business and putting those savings into lower prices, promotions and better customer experience both in-store and online.
“Customers need to trust that they’re getting a fair deal every time they walk into our stores,” he said. “We’ve made progress on price, and I want to keep pushing by pulling unproductive costs out of the business, investing in everyday value, sharpening our promotions and making sure customers see and feel the difference when they shop with us.”
This effort is happening as inflation is driving up the price of groceries. The most recent Consumer Price Index report showed food and beverage prices climbing 3.2% annually, while food consumed at home — or grocers — saw its largest increase in nearly three years. Meat, poultry, fish and eggs prices increased 1.3% in April alone, with fruits and vegetables up 1.8%.
Research by PYMNTS Intelligence shows that 89% of consumers feel financial stress related to grocery prices, up from 84% in October.
“Grocery inflation has evolved from a temporary budgeting problem into what many households now view as a recurring cash flow challenge,” PYMNTS wrote earlier this month.
