Kroger keen on 'customer-first' innovation
June 20, 2014
by Eric Schroeder
CINCINNATI — “Customer-first” has been a key driver of sustainable growth at The Kroger Co., and in the first quarter the strategy helped spur gains in earnings and sales.
The Cincinnati-based retailer posted net income of $501 million, equal to 99c per share on the common stock, in the quarter ended May 24, which was up nearly 2% from $481 million, or 93c per share, in the same period a year ago. Sales increased 10% to $32,961 million from $29,997 million.
In a June 19 conference call with analysts, Mike Ellis, president and chief operating officer, highlighted several innovations that are improving Kroger’s connection with customers and growing market share. Specifically, he mentioned corporate brands and Kroger technology teams.
“In corporate brands a strategic differentiator for Kroger’s corporate brand portfolio is our multi-tier offering,” Mr. Ellis said. “It allows us to offer the right price points and product experiences for everyone. In the first quarter we introduced new branding and packaging for our value products — the ‘good’ tier of our ‘good, better, best’ program. The new design calls out to customers with attractive uplifting packaging and the response so far has been really terrific.”
Mr. Ellis said Kroger has replaced the Kroger Value name with Heritage Farm for its fresh products.
“The name better reflects the inherent quality of the brand, and we are already seeing positive acceptance from our customers,” he said.
Elsewhere, Mr. Ellis said Kroger is implementing fundamental foundational technology to leverage its capabilities. One example of current work in the area involves real-time temperature monitoring in the retailer’s supermarkets.
“Today, temperature checks are performed manually by our associates, but by using interactive sensors that are connected through an in-store network, we can better ensure the freshest foods by allowing for more frequent, real-time temperature checks of meat, produce, deli and frozen food products,” he said. “And we love these kinds of initiatives because they save money and they free up time for our associates to engage with customers. And most importantly this technology will help improve our already vigorous food safety efforts.”