Expect substantial price reductions in the coming months, as promised by Kroger's CEO, Rodney McMullen. This initiative is designed to draw in more shoppers, while reinvesting in competitive pricing, superior shopping experience, and higher pay rates.
Kroger’s Price-cutting Strategy
Substantial price drops are not a new strategy for Kroger. The company has followed a policy of low pricing since 2003. Over these years, this approach has led to savings of a staggering billion for customers. This approach was maintained even at the expense of reducing the company's gross profit margin to 5%, keeping grocery options affordable. This counters the tactics adopted by rivals such as Amazon and Walmart.
Future Investment Plans and Mergers
The recent announcement of price cuts follows the news of the upcoming merger with Albertsons. Previously, Kroger had acquired Harris Teeter in 2014 and Roundy's in 2016, investing million and million in these companies respectively. Now, after its merger with Albertsons, the company plans to funnel a further million into lowering prices and expanding options for customers. An additional .3 billion has been set aside to enhance Albertsons' locations.
Addressing Customer Complaints
In the recent past, there have been grievances from customers accusing Kroger of price gouging. Some disgruntled shoppers have even called for store boycotts due to high prices. This new pricing strategy offers a direct response to such complaints, demonstrating commitment to affordable pricing.