The Kroger Co. saw the COVID-19 pandemic trigger large sales increases across both physical stores and digital channels in March, reporting that identical-supermarket sales without fuel accelerated by approximately 30%.
The grocer is identifying three phases of customer behavior to explain strong sales in February and the larger jump in March:
- Initially, there is a surge in demand due to customer stockpiling.
- This is followed by a period when demand begins to taper off but remains higher than normal as customers adjust to the new dining and travel restrictions, people working from home and children home from school.
- Beyond this phase, it's too early to speculate what will emerge as the “new normal” in food consumption at home.
Looking toward the rest of the year and that "new normal," Kroger is expecting volatility in sales and is maintaining current guidance for full-year 2020.
To that end, the company is delaying certain cost-saving initiatives to focus all resources on the COVID-19 pandemic. However, Kroger is making investments in its workforce, associate and customer safety, and the supply chain to provide shoppers what they need during all phases of the response.
“Kroger’s most urgent priority is to provide a safe environment for associates and customers, with open stores, comprehensive digital solutions and an efficiently operating supply chain, so that our communities have access to fresh, affordable food and essentials,” said Rodney McMullen, Kroger’s chairman and CEO. “We are so proud of our dedicated associates who are on the front lines serving our customers when they need us most. A huge thank-you to all of our associates, whose efforts are nothing short of heroic.”
The aptly named "Hero Bonus" is a $2 premium above the standard base rate of pay that the grocer is giving to hourly frontline grocery, supply chain, manufacturing, pharmacy and call center associates for hours worked March 29 through April 18. This is in addition to other bonuses announced earlier.
Kroger has also hired more than 32,700 new associates in the last two weeks, many from restaurants, hotels and foodservice distributors that were out of work due to the coronavirus.
Additionally, the grocer and its Zero Hunger | Zero Waste Foundation have deployed more than $3 million to hunger-relief resources for those communities most impacted by the coronavirus.
Cincinnati-based Kroger employs nearly half a million associates who serve 9 million-plus customers daily through a seamless digital shopping experience and 2,769 retail food stores under a variety of banner names. The company is No. 2 on Progressive Grocer’s 2019 Super 50 list of the top grocers in the United States.