When you head to the grocery store these days, you’re more likely than not to see a line of people out front, worried shoppers inside trying to keep their distance, and empty shelves where the toilet paper used to be. And your store’s owners? They’re already looking to the future – and seeing dollar signs.
These unprecedented times have led to unprecedented sales for grocery stores. And they’re hoping to turn a bad short-term situation into good long-term profits. A somewhat cynical way to look at it, perhaps, but they do have a business to run – and, after all, who isn’t looking forward to the end of all this?
The CEO of Kroger, the country’s largest traditional grocery chain, is offering some insight into how his company is catering to customers new and old – and how it hopes to keep them coming back by offering coupons, deals and a satisfying shopping experience, to tempt them into becoming regular Kroger shoppers in the post-pandemic era.
In a webcast with investors this past Thursday, Rodney McMullen said Kroger is still having sales and putting out a weekly ad, while some of its competitors are not. Kroger is still issuing and accepting coupons, while some of its competitors are not. And Kroger hopes to emerge from this crisis with a new set of loyal customers – while some of its competitors may not.
“We have a lot of new customers coming in our stores,” McMullen said. Many of them “are just looking for a store that’s doing the best job on in-stocks.” So his goal is turn those shoppers into regular customers – by impressing them with Kroger’s offerings, and tempting them with deals.
“We think it’s important for our customers to continue to have promotions, because there’s a lot of fear in the economy,” he explained. Some of those promotions have changed – “in the past, we would have been aggressive users of ’10 for $10′, or ‘Buy 5 Save $5’, those types of things,” McMullen said, whereas now, “we’ve tried to do promotions that only incentify you to buy one item, versus trying to stock up.” But he said that doesn’t mean promotions have gone away. “As a matter of fact, I was talking to a couple of customers yesterday, and that was one of the things they were telling me, that they were surprised that we still have yellow tags in the store, and they were appreciative of it.”
Compare that to what some others have done during the pandemic. Hy-Vee was one of the first grocery chains to stop printing a weekly ad, and others have followed. H-E-B has stopped offering digital coupons, while BJ’s has stopped accepting paper coupons. And don’t think Kroger hasn’t noticed.
“There are some of our competitors that aren’t running promotions,” McMullen noted. “We continue to run promotions, both a physical ad and digitally. And we continue to do communications with customers through loyal customer mailings or digital offers as well.”
Regular Kroger shoppers typically receive personalized store coupons in the mail or online each month. Newer shoppers used to have to wait a while before they started receiving any special offers. But not anymore. Now, “on new customers, we start sending them that information immediately, because we think it’s incredibly important,” McMullen said.
Incredibly important, when it comes to tempting those new shoppers into coming back – and tempting them to spend more money on Kroger-branded products in particular. “We have a lot of new customers buying Our Brand products,” McMullen said. “Our expectation and hope is… they find out how good they are, and they get addicted to Our Brand and we end up gaining share.”
McMullen emphasized that Kroger’s priorities right now are keeping its employees and customers safe, keeping its shelves stocked, and helping the less fortunate with charitable giving during these troubled times. But if Kroger can come out of this crisis with more customers who shop with them more frequently – all the better. “One of our principal goals is to make sure we come out of this stronger than when we started,” McMullen said. And the good news is “it appears that people are liking to cook as a family more than they thought they would,” he said, so “we’re working hard to make sure people fall in love with eating as a family again.”
So if grocery shopping ends up becoming more of a pleasure than a chore, and you’re able to save money while doing it, maybe some good will come from this crisis after all – both for you, and for Kroger itself.
Image source: Kroger
