The Kroger Co. is investing in the next generation of its workforce by pledging to expand resources for associates after its merger with the Albertsons Cos. is completed.
Kroger announced Wednesday that it will provide the combined Kroger-Albertsons workforce of more than 700,000 part-time and full-time associates access to its continuing education benefit, which offers up to $21,000 of reimbursement toward higher learning or continued development.
The company will also expand access to its Goldman Sachs Ayco financial coaching tool.
These programs build on a previously stated commitment that the combined company will invest $1 billion to continue raising associate wages and comprehensive benefits.
In an exclusive interview with Progressive Grocer, Kroger Chief People Officer Tim Massa said the additional investments "reinforce the benefits of these two great companies coming together and how an individual can really come for a job and discover a career. We hope that it's for many, many years, and that the opportunities are endless. And with the scale of our group and these benefits, we believe it's another two additional components to help reinforce our message of the goodness of this merger coming together."
Associates will be able to use the continuing education funding to pursue a high school equivalency exam, professional certification or advanced degree, among other options.
Since its inception in 2018, more than 15,000 Kroger associates have participated in the program, Massa said. He said the retailer has reimbursed nearly $39 million to those associates during that five-year period, and just last year alone, Kroger had more than 5,000 associates enroll in the program and the company reimbursed around $9.8 million.
He said the continuing education benefit is part of Kroger's investment in an associate's quality of life at work, and also outside of work.
"We call it career well-being. The element of discovery is so important today across all five generations that work for us," Massa said. "We hope someone is going to get life skills from us, and we hope that they can continue and find new opportunities throughout our enterprise. And it's through helping them also with improving their own learning and education outside of work. They may be wanting to get a GED or a two-year degree or a four-year degree or some type of certificate or learning that's going to help them achieve what they want to do."
Kroger’s Goldman Sachs Ayco financial coaching tool offers both salaried and hourly associates access to coaches as well as online tools and resources to create a savings plan, learn how to avoid common financial pitfalls and explore opportunities to maximize all available company benefits.
Massa mentioned the feedback he's received from associates about the Ayco tool has been extremely positive.
"We take pride in listening to feedback from our over 400,000 associates," Massa said. "And there was a big need to provide financial education for all of our workers, salaried and hourly. We were the first retailer to partner with Ayco for an hourly workforce. Today it is providing financial education to help any associate wherever they are in their journey of work. They may be wanting to save for college, save for a car, save for a house or planning for what does retirement look like down the road. We're thrilled that as we look to bring this merger to life with Albertsons, that when the deal is approved, we would offer that financial planning to the combined companies, which will be over 700,000 associates."
Massa said these kinds of benefits are helping Kroger retain employees during what continues to be an extremely challenging labor market for grocery retailers.
"We're seeing our retention rates increase, turnover going down across all departments and all areas," Massa said. "We're always going to have opportunities for folks at Kroger and our family of banners, but coming out of COVID and the pandemic, we believe with our wage investments that we've been doing, over $1.9 billion since 2018, what we're planning on with the merger of another billion dollars, we believe that we're in good shape. I mean, we're always going to have openings, but we're more in control and more stable than what we were facing during the pandemic and when we were in an essential business mode."
Massa said the retailer is growing its pipeline of associates and associate leaders by leveraging its partnership with Axonify, a tool that helps the retailer develop talent from Day One.
"Our Axonify program really helps us develop associates from Day One by teaching them what's expected of them, offering specific role-based curriculum, and how to serve our customers in the most effective way," explained Massa.
Another way that Kroger is growing its future pipeline is via the Albertsons merger. Massa said both companies have similar leadership development strategies and cultures.
"It's our 140th year in the business. We're a very proud culture. As we look at Albertsons as well, they have a very strong purpose, values and leadership behaviors. And I think the three of those, purpose, values and leadership behaviors, we're really looking at the best of both of those and how really we want to create an awesome associate experience for every associate," Massa said.
Massa pointed out that Kroger associates are saying they want to be part of something, they want to belong, and they're excited to be part of a larger company, with more opportunities to develop.
"One of the strengths in this culture is no one can do anything alone. We have to be authentic, genuine leaders, and we have to raise our hand when we need help," he explained. "I think in today's environment and going forward, people need to know it's okay not to be okay, to know that you have someone to ask for help. And the more we can collaborate cross-functionally, the further, faster and better we meet the needs of our talent workforce. They want to know we care about something larger than the company itself, and we want to leave a lasting impression. And also that we're serving our customers how and when and where they want to be served. I think those aspects are only going to happen if we're collaborating more and really coming together cross-functionally. I think you're going to see more of that in this great company."
Kroger's merger with Albertsons is expected to close early next year.
In June, Kroger reported a lift in sales for its first quarter, while also growing digital sales 15% and increasing customer households and trips. The grocer notched $45.2 billion in sales for the quarter, compared to $44.6 billion for the same period last year, a 3.5% increase with the exclusion of fuel.
Serving over 11 million customers daily through digital shopping and retail food stores under a variety of banner names, Cincinnati-based Kroger is No. 4 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Boise, Idaho-based Albertsons operates more than 2,200 retail stores with 1,700-plus pharmacies, 402 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities in 34 states. The company is No. 9 on The PG 100. PG also named both companies as Retailers of the Century.