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Kroger addresses shifting competitive landscape

3/20/2018
Across the supermarket competitive landscape, pharmacy remains a key component of Kroger's overall offering and the company plans to strengthen that offering looking forward, Mike Schlotman, Kroger executive vice president and CFO, told investors at last week's Bank of America Merrill Lynch 2018 Consumer & Retail Technology Conference.

"[Kroger's] script count, ID script count and total script count, continues to grow nicely," Schlotman said. "It's a very important part of our business [and] our team has done a great job. There are some things they're working on to make the business even better. That's actually some of the work that's [been] submitted as part of the Restock Kroger Plan."

Schlotman noted that the combination of Albertsons and Rite Aid may make for a sharper competitor overall, though Kroger is up to the challenge. "They're good operators. Bob [Miller] has a great track record; John [Standley] has a great track record," he said, noting both were at the helm of Fred Meyer when that operation was bought by Kroger. "We like our market position today relative to a lot of competitors."

While not in the pharmacy business, one new competitor to the supermarket competitive landscape that Schlotman is keeping an eye on is Lidl, despite that grocer's slow start in the U.S. "We spent a lot of time before Lidl came to the United States, going to almost every European country where they operated, actually sitting down with the management teams of the traditional supermarket operators in those markets to understand what worked, what didn't work and what they would have done differently," he said. "A lot of those strategies is what we've deployed when [Lidl] started opening their first stores in the mid-Atlantic region."

Kroger earlier this month reported a total annual sales net increase of 6.4% to $122.7 billion in 2017 compared to $115.3 billion in 2016. Kroger is targeting identical supermarket sales growth, excluding fuel, to range from 1.5% to 2% in 2018. https://www.drugstorenews.com/retail-news/kroger-posts-annual-sales-gains-6-4-122-7-billion/
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