Kroger Confirms 'High Velocity' Growth Plans

Kroger Co. chairman and CEO David B. Dillon this week reiterated the Cincinnati-based grocer's high-velocity growth plan and announced a company-record community investment of $250 million in 2012.

“Kroger’s growth strategy builds on our strong momentum to deliver even higher returns to shareholders,” Dillon said at Thursday's annual shareholders meeting. “We are confident that this strategy will be both resilient and sustainable for the longer term.”

Kroger's momentum doesn't seem to be letting up since the recent announcement of 38 consecutive quarters of same-store sales growth. With total sales stopping just shy of $97 billion in 2012, the grocer is poised to pass the $100 billion mark.

"We exceeded our expectations on the bottom line in 2012, even after raising our guidance several times throughout the year," Dillon said. "Fueled by this exceptional performance in 2012, Kroger delivered a total return to shareholders of 18 percent on a comparable basis. It is clear that our Customer 1st strategy is working for shareholders, as well as for our customers."

Kroger’s growth strategy, which the company outlined during its investor conference last October, includes a new, long-term earnings per share growth rate target of 8 to 11 percent; increased capital investments to grow market share in communities where the company currently operates and to expand into new markets; and growth in the digital channel.

“It is no secret that digital is the fastest-growing channel to connect with customers. So we are expanding our leadership in personalization through innovations such as our mobile app,” Dillon said. “Now, not only can customers add digital coupons directly onto their loyalty cards, but today you can sort those coupons by their relevance to you. In fact, more than 500 million digital coupons have been downloaded to date through our mobile app and at Kroger.com.”

The total contribution of $250 million, which includes cash and food donations from the company, The Kroger Co. Foundation, customers, associates and supplier partners, impacted communities in a variety of ways including hunger relief efforts through Kroger’s partnership with the nation's largest domestic hunger agency, Feeding America; women’s health and breast cancer initiatives; military support programs through Kroger’s partnership with the USO; disaster relief efforts; and through the contributions to local schools and community organizations.

“Certainly, many things have changed over the past 130 years, but one thing that has remained the same is Kroger’s commitment to serving our communities,” Dillon said. “We are in the business of touching people’s lives every day. We are truly excited about all that lies ahead for Kroger this year and beyond.”

2013 marks the 130-year anniversary of the founding of The Kroger Co., which began in Cincinnati with Barney Kroger’s first store on Pearl Street. "And yet," Dillon noted, "two of our banners have been in business even longer: the Ralphs division, which is 140 years old, and Jay C Foods, which celebrates its 150th anniversary this year."

Kroger's success, Dillon declared, "is a story of people - people who are proud to work for our company. People who are inspired to make each customer’s life a little better, every time they visit one of our stores. People who are dedicated to understanding and meeting the ever-changing needs of customers and their families."