Once again, the financial performance of the The Kroger Co., in both its fourth quarter and fiscal 2021, was extremely strong with Q4 net sales reaching $33.05 billion, an increase of 7.5 percent from a year earlier. Identical sales were strong, too, growing by 4 percent (ex-fuel) year-over-year for the period ended January 29.
In a related announcement, the Cincinnati-based supermarket chain said it will build another Ocado-driven customer fulfillment center (CFC) in Northeast Ohio that will provide online delivery service to customers in Western PA, the first time ever the largest pure-play supermarket chain in the country will directly serve the Keystone State.
“Our strategy of leading with fresh and accelerating with digital propelled Kroger to record performance in 2021, on top of record results in 2020. We are incredibly proud of our associates who continue to deliver for our customers through the pandemic,” said Kroger chairman and CEO Rodney McMullen. “As we look to 2022, we expect the momentum in our business to continue and have confidence in our ability to navigate a rapidly changing operating environment. We are leveraging technology, innovation, and our competitive moats to build lasting competitive advantages. Our balanced model is allowing us to deliver for shareholders, invest in our associates, continue to provide fresh affordable food to our customers and uplift our communities. We remain confident in our growth model and our ability to deliver total shareholder returns of 8 percent to 11 percent over time.”
As has been the case with other publicly-traded retailers, Kroger saw a decrease in its e-commerce sales, both in Q4 and for the full year. Digital revenue dipped by 13.3 percent in the quarter and 3.2 percent for the 52-week period as more customers returned to in-store shopping.
“We continue to attract new customers to our digital platforms. During the quarter, we saw new seamless pickup and delivery household acquisitions increase 25 percent compared to the third quarter,” McMullen noted. “We remain committed to doubling digital sales and profitability by 2023, which was announced in 2021,” he explained, adding, “We do not expect digital growth will be linear, especially as we cycle the sales spike in 2020 and customers become more comfortable shopping in-store again.”
In Q4 and for its full fiscal 2021, Kroger earned (net income) $686 million and $2.8 billion, respectively. That compares to the $630 million profit in its fourth quarter and $2.74 billion the prior year. Kroger rang up $137.9 billion in overall fiscal 2021, a 4.1 percent gain over fiscal 2020.
The big retailer also provided an update on its customer fulfillment center growth. During Q4, Kroger opened a 375,000 square foot “shed” in Forest Park, GA (Atlanta area) and a cross-docking facility in Indianapolis. It also plans to open cross-dock depots in Oklahoma City and Louisville as well as another full-service CFC in Concord, NC. And, just before presstime we learned that Kroger will build additional cross-dock facilities in Austin, TX, San Antonio, TX and Birmingham, AL.
While Kroger did not disclose a specific location for its planned “Cleveland area” CFC, it did state that the facility will be 270,000 square feet, create 400 jobs and serve customers in Northeast Ohio and Pennsylvania.
“Kroger is incredibly excited to expand our delivery business in our home state and provide northeast Ohioans access to thousands of fresh and popular products, including our industry-leading Private Selection and Simple Truth brands, through our customer fulfillment center,” said Gabriel Arreaga, Kroger’s senior VP and chief supply chain officer. “The Cleveland region facility is an accelerant to our strategy to achieve the doubling of our digital sales and profitability rate by the end of 2023, and we’re eager to provide a rewarding experience for our new customers in Northeastern Ohio and Pennsylvania and create new jobs for individuals passionate about technology, engineering, operations, logistics and transportation, inventory and quality management, and customer service and engagement.”
