You are here
"Wow…what a year!"
And so began comments to investors by Rodney McMullen, chairman and CEO of The Kroger Co., shortly after the nation's largest food retailer released its fourth quarter and full 2015 financial performance.
While investors were less enthusiastic following the call – as evidenced by Kroger's 8 percent stock plunge in mid-day trading as a result of sales missing expectations on both an overall and same-store basis – McMullen told investors he was "delighted to report that Kroger executed on our growth plan and delivered on our financial performance commitments in 2015. We delivered our 49th consecutive quarter of positive identical supermarket sales growth without fuel, and our 11th consecutive year of market share growth," while also meeting its goal to amp up capital investments while simultaneously improving capital ROI.
Giving a special shout-out to the retailer's 431,000 associates who "make it all happen," McMullen said he's especially pleased with the company's proven abilities to "continue to deliver for our customers and our shareholders with remarkable consistency," as well as its integration of Roundy's, which he said, "is well underway."
Another bright spot on the retailer's aggressive agenda, according to McMullen, is the successful expansion of "new technologies that Harris Teeter and Vitacost.com brought to Kroger, which provide an even better shopping experience for our customers. We developed ClickList – our shop online, pickup at the store service – based on what we learned from Harris Teeter’s Express Lane." Having expanded from one to seven markets, "We continue to improve the offering and our customers and associates both are providing very positive feedback,"
Main & Vine Making Waves
The chain is also testing Vitacost.com’s technology and ship-to-home infrastructure in Denver through a pilot with its King Soopers division, as well as piloting a related "Endless Aisle experience" in its new concept Main & Vine store that opened last month in Gig Harbor, Wash., which McMullen described as highly promising and off to a great start with "very positive" customer feedback.
"We are very excited about this new community-focused grocery store concept," which he said "mixes local, specialty and everyday products all at affordable prices. It reimagines the modern grocery shopping experience…placing in the middle of the store fresh produce and bulk items, along with an event center where shoppers can enjoy cooking demonstrations, food and beverage tastings, and find new recipe ideas. "
Another big gainer for Kroger during 2015, per McMullen, was its corporate brands portfolio, which he said accounted for more than $20 billion of total revenue. During Q4 alone, Kroger's corporate brands "represented approximately 29 percent of total units sold, and 26.2 percent of sales dollars, excluding fuel and pharmacy."