Kroger adapts with the times

NRF 2023: CEO Rodney McMullen on evolving the customer experience

Rodney McMullen likes to joke that he went to college on a Kroger scholarship — he just had to work 32 hours a week to get it. He joined the company in 1978 as a part-time stock clerk, and has risen to chairman of the board and CEO of The Kroger Co.

As so much of retail has changed, there are elements that have remained the same. McMullen hears many of the same words and concepts among the leadership team that he did 35 years ago. And the focus on caring for associates, guests and communities continues.

“I knew my predecessor, my predecessor’s predecessor, and my predecessor’s predecessor’s predecessor,” he told NRF President and CEO Matthew Shay during “Feeding the human spirit: A conversation with Kroger CEO Rodney McMullen” at NRF 2023: Retail’s Big Show.

"I do think it’s one of the benefits of coming up through a store, that you understand how hard that job is, but also how rewarding it is."

Rodney McMullen, The Kroger Co.

“I do think it’s one of the benefits of coming up through a store, that you understand how hard that job is, but also how rewarding it is. I feel so fortunate, because we don’t have to teach our organization a new language,” he said.

“Now, I do have to modernize it. I always tell people that the only thing I know for sure is that people are going to keep eating. How they eat? I guarantee that will change. It’s our job to continue to support customers and communities to eat the way they want to, and it has to be a good value for the money, it has to be amazing quality and it has to be easy — however somebody defines ‘easy.’”

In recent years, Kroger has seen guests learning how to cook again, viewing the activity as a way to spend time with family. Associates have learned they could do a lot more than they imagined when the situation called for it. And they’ve also recognized how important they are to their local communities.

In the early days of the pandemic, McMullen said, it was helpful to hear from those in other parts of the world who were a month or so in front of what was happening in the United States. On twice-weekly calls, they shared what they had found helpful in keeping people safe, as well as what hadn’t worked so well. Kroger ended up implementing 30 different safety elements along the way.

NRF 2023

Did you miss us in NYC? Take a look at our NRF 2023: Retail's Big Show event recap.

The company — with just over 2,700 stores and more than 435,000 associates — was recently recognized by Newsweek as one of “America’s Most Responsible Companies” for 2023. It’s the fourth consecutive year for the honor.

Kroger also has continued to explore and implement technology to remove friction, with allocation of resources toward tech “three or four times what it was even five years ago,” McMullen said. There’s no sign of that slowing down. But it has to be effective: “To us,” he said, “if you realize you’re using technology, it’s not good enough.”

People used to shop about once a week for groceries, but now might engage with the store in a more ongoing, seamless way — using the app to prepare a shopping list, ordering groceries online or downloading digital coupons. “All they talk about is being inspired, or getting the food they want,” he said. “They don’t ever talk about it in the ways we talk about it, in terms of online, or store. They just talk about it as what’s easy for them at that particular point in time.”

Heading into 2023, about half of Kroger’s customers are under strain from financial pressures, and have already starting to manage their households differently, he said. They’re being more aggressive about downloading coupons, and the store’s brands are up “double-digit volume.” Kroger collaborates with consumer-packaged goods companies and manufacturers to lower costs whenever possible, offers curated coupons (more than 1 trillion coupons have been downloaded since that option became available) and works to ensure its store brands are as good as or better than national brands.

Customers may switch to save money, McMullen said. But the experience still must be up to par.

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