FOX Business’ Lydia Hu breaks down how inflation is affecting the cost of groceries, and FOX Business’ Connell McShane shares social media memes inspired by rising prices.
Kroger CEO Rodney McMullen said Monday the company has been working with its manufacturers on how they can work together to reduce costs as its customers remain under financial strain.
“Approximately half of our customers are under severe financial pressure … their wages have not kept pace with the inflation they have suffered,” McMullen said during a keynote session at NRF 2023: Retail’s Big Show in New York City on Monday.
| ticker | security | Last | To change | To change % |
|---|---|---|---|---|
| KR | THE KROGER CO. | 45.22 | -0.45 | -0.99% |
McMullen said the company is always thinking about how to make things affordable and accessible for its customers, especially as they remain under inflationary pressures, which it forecast will ease or level off towards the end of the year.
“We expect you to see fairly moderating or flat inflation later in the year,” McMullen said. “We still don’t see much deflation now.”
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When the next group of hens comes by and lays eggs, “you should start to see some deflation in some categories, but not many.”
Egg prices have skyrocketed in recent months due to an ongoing bird flu outbreak coupled with rising feed, fuel and labor costs.
While December inflation fell to 6.5% yoy, marking the sixth straight year-on-year slowdown, it is still about three times the pre-pandemic average, underscoring the ongoing financial strain on shoppers.
Rodney McMullen, chairman and chief executive officer of Kroger Co. (Lauren Justice/Bloomberg via Getty Images/File/Getty Images)
McMullen reiterated Monday that its merger with Albertsons will help cut costs and lower prices for buyers.
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McMullen said the merger with Albertsons “will create a tremendous amount of synergy.”
Eggs and dairy products are seen at a Kroger supermarket in Atlanta on October 14, 2022. (Elijah Nouvelage/AFP/Getty Images)
In October, the company said in a statement that it plans to reinvest $500 million in cost savings from synergies to lower prices for customers.
“We know that on every deal that we keep, we’re going to start cutting prices on day one,” McMullen said during the keynote session at NRF 2023.
McMullen said the company has reduced prices by more than $5 billion annually since 2006.
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“When you do the right thing for the customer, do the right thing for the employees and support your communities, shareholders benefit,” he said.
Meanwhile, the company says it has relied on electronic coupons to help customers stretch their budgets.
Kroger CEO Rodney McMullen says the company has been working with its manufacturers on how they can work together to reduce costs as its customers remain under financial strain. (Jakub Porzycki/NurPhoto via Getty Images/File/Getty Images)
But it’s also found that its own brands are “gaining meaningful market share” in some areas, according to McMullen.
“What we’re finding is that customers have been switching to our brands, initially to save money… when they switch, they stay with us even if their budget is a little less stretched,” he said.
FOX Business Megan Henney and Associated Press contributed to this report.