Kroger sees greater opportunity in ‘natural’ portfolio
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CINCINNATI — Natural and organic foods are only the “sixth or seventh largest department” at Kroger, but it is the fastest growing department on a percentage basis, and sometimes dollar basis, said Rodney McMullen, president and chief operating officer. With that in mind, the retailer has plans to grow the department through such store brands as Simple Truth.
Mr. McMullen added that if the retailer’s natural food sales were compared to those of other natural foods retailers, Kroger would be the second largest retailer “out there on a standalone basis by a pretty wide margin.”
Looking ahead, Mr. McMullen said Kroger has plans to grow its presence in natural and organic products.
“If you look at the market share opportunities for us, we can easily see how that business could double from where we are today,” he said. “But we don’t see it as something that’s a dream to double our business. We actually have a pretty good plan in place that will get us significantly along the way on getting there in a reasonable period of time.”
He said Kroger is driven to grow the category, because “that is where the consumer is headed.”
“We think the growth there is because customers overall – Our existing customers continue to buy more and more organic and natural foods, plus the younger generation buys a higher share in those categories,” Mr. McMullen said.
Mr. McMullen made his comments during a conference call with financial analysts to discuss the retailer’s third-quarter results for fiscal 2013, ended Nov. 9. Net income for the quarter was $299 million, equal to 58c per share on the common stock, down 6% from $317 million, or 61c per share, in the same period a year ago.
Sales for the quarter were $22,505 million, an increase compared with the previous year when sales were $21,807 million.