Facing growing competition from Amazon and brick-and-mortar grocers, Kroger is rallying its people and resources around a “Restock Kroger” platform. The plan, will cost an estimated $9 billion over three years, is a comprehensive re-set of its competitive position.
It also aims to reassure stockholders, employees and customers that it has a strategy to remain one of America’s leading mainstream grocery brands.
The action plan (which was presented at the company’s annual investor day, held in New York) involves doubling down on data insights to overhaul the customer experience with everything from personalized online recipes to expanded home delivery, from more curbside pickup to a rethinking of how Kroger restocks shelves. The Cincinnati-based retailer may even sell off its convenience stores.
Time—and speed—is of the essence. “We need to move faster on digital,” McMullen said on its Q2 earnings call. “We have the scale, the data, physical assets and human connection to win.”
Kroger is increasing its digital investments by 200% in 2018 on areas including digital shopping, merchandising, in-store technologies, health and wellness and payments, along with in-store Wi-Fi and modernization.
“Restock Kroger” means an accelerated and more data-driven effort around pricing, personalized communications with customers and a massive revamp of product assortments. The largest collector of food purchase data in the U.S. intends to use that data as a competitive advantage as it expands its efforts to provide meal- and food-shopping solutions.
Data will also help enhance the personalization of offers to consumers through digital coupons, recipe suggestions and other ways to help guide the rollout of the company’s ClickList online shopping offers.
It will also roll out a system that allows customers to ring up their own groceries through a wireless handheld scanner, which will be introduced at 400 stores by next year, up from 20 today.
“We will change the way people eat in the U.S.,” said Rodney McMullen, chairman and CEO. “If you are eating, we want to serve you. Unless you are eating in a white tablecloth restaurant, we want to be able to provide that meal for you.”
On the sustainability and corporate citizenship front, it’s also promoting its Zero Hunger, Zero Waste sustainability platform, with a goal of establishing a $10 million “innovation fund.”
The goal: help eliminate hunger in its communities and eliminate food waste in the company by 2025. To that end, Kroger will accelerate food donations to give 3 billion meals, donate more balanced meals as well as random food supplies, and advocate for public policy solutions to address food waste.