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Kroger (KR) Boosts Offerings on Popularity of at Home Dining

Zacks Equity Research
·3 min read

With more time being spent indoors amid the ongoing coronavirus pandemic, at-home dining trends have gained much prominence. This has boosted demand for groceries and essential commodities. The trend is aiding growth for several grocery retailers including The Kroger Co. KR. The company is proactively responding to consumers’ altered shopping and dining practices by introducing new and unique products as well as boosting e-commerce solutions. Let’s dig deeper

Efforts to Boost Offerings are Encouraging

We note that Kroger is undertaking every effort for maintaining its strong footing in the grocery space by undertaking efforts such as introducing new items, providing attractive offers, optimizing merchandize as well as boosting digital offerings. In respect of new products, Kroger has been active on broadening natural, organic and plant-based food items. With health and well-being gaining importance in the current challenging times, there has been a growth in the demand for natural food offerings. In recent developments, Kroger expanded its private-label Simple Truth Plant Based roster with more than 50 fresh and flavorful plant-based food items at reasonable prices. Going forward, management expects to accelerate Simple Truth Plant Based collection, which is solely available at Kroger's family of stores.

Kroger also makes use of advance technologies to better meet consumer needs. In this context, the company recently introduced a unique artificial intelligence (AI)-based recipe tool — Chefbot. The new solution seeks to reduce food wastage, alongside transforming cooking into an enjoyable experience by offering several recipe options.  The launch of Chefbot is part of the company’s Fresh for Everyone brand transformation campaign, which was initiated last year. The technology will help consumers meet their meal aspirations, especially under the current pandemic-induced circumstances where dining at home is being widely practiced.

Earlier this month, the company launched two on-premise ghost kitchens in collaboration with ClusterTruck. The on-premise kitchens were launched across stores in Metro Indianapolis, IN and Metro Columbus, OH. The concept streamlines ordering, preparation and delivery, which enables Kroger to efficiently cater to growing customer demand for quick, fresh, restaurant-quality meals.

Notably, the company is expanding contact-free payment solutions like Scan and Kroger Pay. It is also striving to boost delivery services for meeting the rising demand for convenient and contactless pickups. Hence it has been bolstering services like no-contact delivery option, low-contact pickup service and ship-to-home orders. For the smooth functioning of the system, the company is deploying more e-commerce staff and adding more order pick-up slots. Other retail players such as Walmart, Inc. WMT, Costco Wholesale Corporation COST and Companhia Brasileira de Distribuicao CBD are stepping up their game when it comes to broadening omni-channel offerings.

Bottom Line

Kroger’s strategic actions to boost offerings are well aligned with consumers changing needs and preferences amid the pandemic. We expect these efforts to help boost the company’s top line in the forthcoming periods. In fact, management provided a favorable outlook for fiscal 2020, on the back of sustained at-home dining trends.

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