rodney mcmullen In his annual letter to shareholders, Kroger Co. chairman and CEO Rodney McMullen said the company’s “collective sense of urgency has only intensified.”

Despite a deflationary environment in grocery, and the company’s first quarter with negative comps in more than a decade, the Cincinnati-based company is committed to winning.

“Executing our long-term strategy means intensifying our efforts to lower costs. We intend to continue winning with our people, our products and the shopping experience, and we will not lose on price.”

McMullen also said in the letter the company is making “meaningful, targeted investments in digital initiatives.”

That includes:

  • Adding more than 420 ClickList and Harris Teeter ExpresLane locations in 2016;
  • Total online ordering locations now number 640;
  • Testing both Uber and Shipt delivery, with expansions planned for 2017;
  • Expanding digitization of stores, including temperature monitoring.
Movement in the company’s Customer 1st strategy also includes the launch of its new meal kits, Prep + Pared.

“Our culinary team has developed delicious meal kits that are available in pilot stores today, and we have plans to quickly make them available at scale over the course of the next year. Meal kits are one of the many offerings designed to meet our customers’ changing definition of convenience.”

Organic and natural, which ten years ago was not a central focus for Kroger, has become “integral” to the company’s success, he said.

“Five years ago we made a concerted effort to make natural and organic the “plus a little” part of our product strategy (we want our most loyal customers to say “At Kroger, I get the products I want, plus a little”). Today, natural and organic foods are integral to our success – indeed, they are the products our customers have come to expect – and reached $16 billion in annual sales in 2016.”

Go HERE to read the letter in full.


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