Rodney McMullen, Kroger’s chairman and chief executive, said that grocery retailers need to be flexible and diverse if they want to successfully service their customers in the next 10 years.
The lifelong Kroger employee made his comments late last month at the Food for Tomorrow conference sponsored by The New York Times, a two-day meeting that brought together top chefs, policy makers, innovators and leaders from diverse fields to uncover and assess the most important issues and trends affecting the nourishment of our nation and the world.
Since taking the helm of the nation’s largest supermarket chain in 2014, McMullen has arguably been the most successful CEO in the business. He appeared on a panel – “The Golden Age of Supermarkets?” – along with author Michael Ruhlman (whose next book is entitled “Grocery: The Buying and Selling of Food in America). The panel was moderated by Trish Hall, senior editor for the Times and was held at Stone Barns Center for Food & Agriculture in Pocantico Hills, NY.
Expounding on where consumers will be spending their shopping dollars in the future he stated: “Part of it will be ‘I want to pick up dinner.’ Part of it will be ‘I want it delivered.’ Part of it will be, people still are social animals and they’ll still shop. And to some it will be a small store.”
McMullen also emphasized differentiation and personalization as critical elements to Kroger’s future success.
He noted that Kroger’s expanding click and collect online application allows shoppers to create customized shopping lists and complete the ordering produces in 5-10 minutes. The
Cincinnati-based merchant currently offers online ordering and store pickup services at about 400 units.
When speaking about differentiation, the 38-year veteran pointed to its Simple Truth organics line which now garners more than $1.5 billion in annual revenue and last year added 7,000 new natural and organic items, including many from small suppliers.
Responding to a question from the audience about Kroger’s involvement in food deserts, McMullen said Kroger now operates almost 100 units in underserved economically depressed areas. He added that one of the company’s goals is to provide healthier foods to customers who shop in those stores, noting that Kroger is partnering with the USDA to offer coupons for produce to customers on food assistance (SNAP benefits). He acknowledged that his company is willing to take less profit from a store located in a food desert, but said he has a responsibility to Kroger’s shareholders to operate profitable stores.
Among other topics, McMullen discussed during the 30 minute session were the growth of produce – “produce is massively growing, and massively more important today for customers than it was three years ago, five years ago, 30 years ago;” and energy efficiency – “we’ve reduced our energy usage by 35 percent since 2000. Our goal by 2020 is to get it to 40 percent.”
Other panelists who appeared at the two-day conference included Jason Ackerman, co-founder and CEO of Fresh Direct; Matt Salzburg, CEO and co-founder of Blue Apron; Martha Stewart, author and television personality; Jim Kenney, Mayor of Philadelphia, who recently signed into law the city’s controversial beverage tax; and Tom Vilsack, current U.S. Secretary of Agriculture.