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Last Friday, Kroger CEO Rodney McMullen pointed that while the pandemic-related spike in food prices decreases, the at-home cooking trend is increasing and sees the possibility of staying in the long run after the coronavirus situation subsides.
“As we look forward, we see lower inflation than what it’s been over the last several months. It’s one reason we didn’t pass through all of the inflation that we incurred in the second quarter… When you look at meat, especially, and some of those areas… we do not see the inflation the way it was earlier in the year as the plants come back on… There’s plenty of raw materials supply out there. It’s just a matter of the plants being able to process it.”Kroger CEO Rodney McMullen on CNBC’s “Closing Bell”
Moreover, McMullen mentioned that he thinks the increase in cooking was due to the Covid-19 outbreak since restaurants had to shut down during the pandemic. With the lockdowns, families had to stay at home and learn to cook.
“So everything that we can see, it’s something that will be a long-term trend because people have, one, learned how to cook and, two, found they enjoy it. And the other special thing is when families eat as a family, they stay together. The kids don’t get into as much trouble. Those kinds of things… But for us, the thing that gives us the most exciting, our customers are telling us they enjoy it.”Rodney McMullen
The company’s online sales reached up to 127% in the quarter, from its 92% growth in its previous quarter. This month of September, Walmart announced it was releasing a paid subscription service, called Walmart+, that comes with grocery delivery as its primary purpose. Walmart is the country’s biggest grocer, while Kroger is the nation’s largest supermarket chain.
McMullen commented that Kroger’s digital grocery offering, which it had been investing in before the pandemic, is unique from its competitors.
“For us, it’s the whole total experience. … One of the reasons why our digital business is strong is personalized things. We do incredibly well on fresh. Customers tell us and expect that our fresh is good, and good relative to our competition, and it’s all of those things together.”Rodney McMullen