The Kroger Co. reported it grew digital sales 15% in its fiscal first quarter ended May 20, 2023.
That came as Kroger increased total company sales 1.3% to $45.2 billion in the first quarter. Total company sales were $44.6 billion for the same period last year. Excluding fuel, comparable sales increased 3.5% from the same period last year, Kroger reported. Gross margin was 22.3% of sales.
The Kroger Co. is No. 8 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers.
Kroger digital sales
Although Kroger did not attach a dollar figure to its digital sales growth, Rodney McMullen, chairman and CEO, said in the retailer’s earnings call that digital coupon redemptions increased to 180 million in the quarter.
He said as customers’ digital engagement increases, Kroger has new and more efficient channels to present the most relevant products. It can also present the right promotions at the right times, “no matter where and how customers choose to shop with us.”
Kroger sees “opportunities to further simplify the digital experience and offer more accurate personalized recommendations,” McMullen said. “Our teams are working with search algorithms and generative AI to improve substitution accuracy and search results.”
Fulfillment options
Growth in both Kroger’s pickup and delivery businesses led to a strong quarter of digital sales growth, McMullen said. He added that even customers who only shop in stores begin their trip through Kroger’s mobile app or website, clipping coupons and creating shopping lists curated for their store.
“We continue to see a split and spend across customer segments,” McMullen said. “The economic environment is more significantly impacting our budget-conscious shoppers, while our mainstream and higher-income shoppers are increasing their spend with us and deepening their loyalty.”
These growing interactions contributed to the 13% increase in digitally engaged households this quarter, he said.
“We value this behavior, as digitally engaged households are more loyal, spend nearly three times more with us and help grow our alternative profit businesses like Kroger Precision Marketing,” McMullen said.
Kroger pickup grew 11% and delivery grew 30%, said Gary Millerchip, senior vice president and chief financial officer. He attributed that growth to customer fulfillment centers and convenience store locations.
Looking forward, he said, Kroger expects “digital will continue to be an important growth driver and anticipate double-digit sales increases will continue for the remainder of 2023.”
Kroger and Albertsons merger pending
“Integration planning has progressed nicely,” McMullen said. “And I’m energized by the people and talent across both the Albertsons and Kroger teams.”
Pending regulatory approval, The Kroger Co. agreed in October to buy Albertsons Cos. Inc. for $24.6 billion. Albertsons is No. 26 in the Top 1000.
“We remain on track and continue to expect the transaction to close in early 2024,” McMullen said. “We are working cooperatively with the regulators and, at the same time, to identify potential buyers for the stores we expect to divest to obtain clearance for the transaction.”
McMullen said Kroger is also committed to not closing any stores, distribution centers or manufacturing facilities as a result of the merger.
Kroger earnings
For the fiscal first quarter ended May 20, 2023, The Kroger Co. reported:
- Total company sales were $45.2 billion in the first quarter. That’s up 1.3% from $44.6 billion for the same period last year.
- Gross margin was 22.3% of sales.
- Kroger digital sales increased 15%. Digitally engaged households grew 13%.
- Pickup orders grew 11% and delivery orders grew 30%.
Check back for more earnings reports.
Do you rank in our database?
Submit your data with this quick survey and we’ll see where you fit in our next ranking update.
Sign up
Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.
Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.
Favorite