Grocery chain operator The Kroger Co. reported a 12% increase in online sales during the fiscal fourth quarter ended Jan. 28, 2023, compared to the comparable quarter a year earlier. CEO Rodney McMullen said Kroger plans to use its expansive network of stores to work with the grocery chain operator‘s dedicated fulfillment centers.
“Despite the easing of pandemic-related shopping behaviors that led to a significant increase in online shopping, more and more customers are incorporating ecommerce into their daily permanent routine,” McMullen told investors during Kroger’s earnings call.
Kroger increased delivery sales by 22% over the last year. The company also opened a new Kroger delivery customer fulfillment center in the Denver area, which it cited as “one of the fastest-growing areas in the country.”
McMullen also noted that it expects “to deliver double-digit growth over the next three years” for digital sales.
Kroger performance highlights
Total Kroger sales were $34.82 billion in the fiscal fourth quarter. That is a 5.2% increase compared with $33.04 billion for the same period in 2021. Excluding fuel, total sales increased 6.2% compared to the same period in 2021, according to Kroger. Operating profit was $826 million, down 15.5% from $965 million a year earlier. Net earnings were $450 million, down 22.8% from $566 million a year earlier.
For the fiscal year ended Jan. 28, 2023, Kroger total sales increased to $148.25 billion, up 7.2% compared with $137.88 billion a year before. Operating profit was $4.1 billion, up from $3.68 billion in the year-ago period. Net earnings were $2.24 billion, up from $1.65 billion a year ago.
Kroger continues to invest in omnichannel grocery experience
Kroger (No. 8 in the 2022 Digital Commerce 360 Top 1000) plans to focus on four key areas to deliver the digital growth McMullen mentioned during the earnings call.
- Drive consumers to its “Kroger-owned digital destination.”
- Fulfilling orders through a combination of its stores and larger fulfillment-dedicated facilities.
- Promote Kroger delivery to have products to customers in “as little as 30 minutes,” according to McMullen.
- Invest in alternative profit streams by growing its digital retail media and last-mile routing investments.
Kroger and Albertsons merger
Kroger and Albertsons, two of the largest grocery store chains in the U.S., announced plans for a merger in October 2022 for $24.6 billion. The pending union would elevate Kroger to compete with the likes of Walmart Inc. online and offline.
“We are working cooperatively with regulators responding to the Federal Trade Commission’s second request,” McMullen told investors. “And [are in] discussions about the transaction while also working to identify potential buyers for the stores. We expect to divest to obtain clearance for the transaction.”
For the fiscal fourth quarter ended Jan. 28, 2023, Kroger reported:
- Total company sales were $34.82 billion, up about 5.2% compared to $33.04 billion for the same period last year.
- Excluding fuel, sales increased 6.2% compared to the same period last year.
- Operating profit was $826 million, down 15.5% from $965 million a year earlier.
- Net earnings were $450 million, down 22.8% from $566 million a year earlier.
For the fiscal year ended Jan. 28, 2023, Kroger reported:
- Total sales were $148.25 billion. That’s up 7.2% from $137.88 billion a year earlier.
- Operating profit was $4.1 billion, up from $3.68 billion in the year-ago period.
- Net earnings were $2.24 billion, up from $1.65 billion a year earlier.
Percentage changes may not align exactly with dollar figures due to rounding.
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