Kroger has extended its streak of consecutive same-store sales growth to 40 quarters — an impressive feat in light of the slow economic recovery.
The company reported a same-store supermarket sales increase of 3.5%, excluding fuel, for the third quarter.
"The resiliency of our Customer First strategy … was on full display during the quarter, even as our internal research shows that customers remain uncertain about the economy," Dave Dillon, Kroger chairman and CEO said.
"It's not simply the scorecard that makes [40 consecutive quarters of positive ID sales] meaningful," Dillon said. "Although 10 full years without skipping a beat is extraordinary," he said. "What makes [this] so remarkable is the underlying importance of the metric. For retailers, identical sales are the strongest indication on whether or not we are connecting with our customers over time."
Connecting with customers is what Kroger does. Since 2003, Kroger's loyal customer base has increased by 83%, according to the company. "That means today [as] compared to a decade ago, 83% more households are shopping with greater [frequency], purchasing more items from our stores," said Rodney McMullen, Kroger president and COO. "Our strong identical sales in the quarter were largely driven by the increases in total and loyal households."
And going forward, health, wellness and pharmacy will play a key role in continuing to drive same-store sales positive.
"We continue to invest to meet our customer's health-and-wellness needs," McMullen said. "This is evident in our pharmacy and Little Clinic businesses. We are very pleased with the strong gains we've made."
But the economy remains a concern.
"Many of our customers are feeling the stress of an economy that is only slowly improving," McMullen said. "And they are not immune to the episodic ups and downs that create uncertainty. There are a number of factors impacting an already-fragile consumer sentiment, including government gridlock, various concerns about health care; and it remains to be seen how the reduction in SNAP benefits will impact the entire retail industry."
With the increase in same-store sales, Kroger reported a third-quarter sales increase of 3.2% to $22.5 billion. Total sales, excluding fuel, increased 4.7% in the third quarter over the same period last year.