CINCINNATI – Fresh foods and prepared meals are key pillars of Kroger’s plan to become “America’s favorite grocer.”
“Customers decide where to shop based on produce, meat and seafood,” Mary Ellen Adcock, chief merchandising and marketing officer of The Kroger Co., said during the company’s investor day presentation on Oct. 20. “Fresh is where the basket starts. And customers build the rest of their basket around these areas. Today, fresh already makes up 37% of the basket. When we win in fresh, we win more than just the fresh department.”
The retailer is investing in these areas to improve product quality in store and online, she said. She identified ready-to-cook and ready-to-eat meals such as sushi and entertaining trays as opportunities to expand shopper frequency and loyalty.
“In total, we’re introducing over 100 meals over the next year, and we’re already in over 600 stores,” Adcock said. “So, the assortment may vary by store size or local preference, but the product looks great. The food is fresh, and the value is clear.”
Kroger aims to capture more eating occasions and compete directly against restaurants and third-party food delivery platforms.
“Every night that we win the weeknight dinner is a trip that would have gone to food away from home, which is a $1.4 trillion market,” Adcock said. “And we see tremendous upside as we only have 4% share. By becoming America’s ready-meal destination and answering what’s for dinner, we open up a whole new addressable market for Kroger.”
Gregory Foran, chief executive officer of The Kroger Co., said US supermarkets have lagged European counterparts in developing consistent prepared-meal programs, citing Sainsbury’s, Tesco and Marks & Spencer as examples of grocers in the United Kingdom that have built substantial convenience meal businesses.
Kroger, he added, is taking a “sensible, measured approach” to scaling its ready meal offerings, with options priced at $6, $10 and $20.
Store design will be an important component of Kroger’s strategy to deliver a “food-first” experience. The company expects to open approximately 110 new stores by 2029, with refreshed formats allocating more space to fresh foods, prepared meals and store brands.
“And then in contrast, we’re reducing space in areas where customers tell us choice does not create value, such as general merchandise and apparel,” Adcock said. “Importantly, these stores are designed for growth, both instore and e-commerce, as we know e-commerce will only continue to grow. So, it has a redesigned e-commerce backroom and more capacity for pickup, so we can serve these customers more reliably.”
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