New Kroger CEO Greg Foran confirmed industry speculation that he is planning to cut the grocer’s prices on “thousands of products” in a bid to reignite sales growth, according to a news report.
“I think about our business a bit like a Formula One race. There’s a lead group of cars that are doing a very good job,” Foran told Bloomberg in an article posted on May 21. “Our objective is to get out of the midfield and start lapping faster, make up the gap on the first-group cars and then ideally pass them.”
CEO wants lower prices as Kroger customers lighten ‘baskets’
Foran said Kroger customers’ “baskets” are down – industry lingo for they are buying cheaper and fewer items amid rising gas prices, persistent inflation, a war in Iran and overall economic uncertainty. He noted Kroger rivals, such as Walmart, Costco, Trader Joe’s, Aldi and Amazon have won more customers by emphasizing lower costs.
“The reality is, the basket has to come down,” Foran said. “It needs to be across thousands of products, and it has to be something that passes the commonsense piece with customers.”
In the months ahead, Foran said Kroger would test lower pricing before rolling them out more broadly over time. He added Kroger will get the money to lower prices by improved sourcing from suppliers and more efficient use of technology.
Kroger also eyes acquisitions
Beyond price improvements, Foran added Kroger is open to making acquisitions to expand its store operations, particularly in the Northeastern U.S. (where it has no presence) and in high-growth markets including Texas, the Carolinas and parts of Florida.
Foran, a former Walmart executive who led its US operations from 2014 to 2019, joined Kroger in February after the supermarket operator spent 11 months searching for new CEO.
The new CEO’s comments come after Kroger reported flat annual sales of nearly $148 billion in March.
This article originally appeared on Cincinnati Enquirer: Kroger CEO Greg Foran talks lower prices and acquisitions report says
Reporting by Alexander Coolidge, Cincinnati Enquirer / Cincinnati Enquirer
USA TODAY Network via Reuters Connect
