Business

Kroger’s CEO says half of its customers are under financial pressure

Kroger CEO Rodney McMullen said Monday that the company is working with its manufacturers on how they can work together to cut costs as its customers continue to be under financial pressure.

“About half of our customers are under a lot of pressure from a financial perspective … their wages haven’t kept up with the inflation they’ve made,” McMullen said during a keynote session at NRF 2023: Retail’s Big Show in New York on Monday.

Ticker Security Last Change Change %
KR KROGER CO. 45.22 -0.45 -0.99%

McMullen said the company is always thinking about how to make things affordable and affordable for its customers, especially as they continue to be pressured by inflation, which he predicts will moderate or decrease by the end of the year.

“Our expectation is that as you get later in the year, you’ll start to see fairly moderate inflation or flat inflation,” McMullen said. “Now we still don’t see a big deflation.”

KROGER, ALBERTSON’S TO MERGE IN $24.6 BILLION DEAL

As the next batch of chickens come in and lay eggs, “you should start to see deflation in a few categories, but not much.”

Egg prices have risen significantly in recent months due to a prolonged outbreak of bird flu combined with rising feed, fuel and labor costs.

While inflation fell to 6.5% in December from a year earlier, the sixth consecutive year-on-year slowdown, it is still around three times the pre-pandemic average, underscoring the persistent financial burden being placed on shoppers .

Rodney McMullen, president and chief executive officer of Kroger Co. (Lauren Justice/Bloomberg via Getty Images/File/Getty Images)

McMullen reiterated Monday that its merger with Albertsons will help in efforts to lower costs and lower prices for customers.

KROGER, ALBERTSONS CHAINS IN POSSIBLE MERGER TALKS: REPORT

McMullen said the merger with Albertsons “will create a tremendous amount of synergy.”

Kroger

Eggs and dairy products are seen at a Kroger supermarket on Oct. 14, 2022, in Atlanta. (Elijah Nouvelage/AFP/Getty Images)

In October, the company said in a statement that it plans to reinvest $500 million in cost savings from synergies to lower prices for customers.

“Every store that we keep, we know we’re going to start lowering prices on day one,” McMullen said during an opening session at NRF 2023.

McMullen said the company has cut prices by more than $5 billion annually since 2006.

COVER FOX BUSINESS ON THE GO CLICK HERE

“If you do what’s good for the customer, do what’s good for associates and support your communities, shareholders benefit from that,” he said.

Meanwhile, the company says it’s relying on electric coupons to help customers stretch their budgets.

Kroger

Kroger CEO Rodney McMullen says the company is working with its manufacturers on how they can work together to cut costs as its customers continue to be under financial pressure. (Jakub Porzicki/NurPhoto via Getty Images/File/Getty Images)

But it also noted that in some areas its own brands are “gaining significant share” of the market, according to McMullen.

“What we’re finding is that customers have switched to our brands, initially to save money … once they switch, they stay with us, even when their budgets get a little tighter,” he said.

FOX Business Megan Henney and The Associated Press contributed to this report.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button