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06/21/2021

How Kroger’s Digital Sales Keep Growing

How is Kroger capturing both digital sales and customer approval? Discover what helped the grocer soar in its latest quarter.
Jamie Grill-Goodman
Senior Editor
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Kroger continues to progress its digital grocery experience and the retailer is making notable headway.  

The Kroger Co. said its digital sales grew triple digits since the beginning of 2019, which includes a 16% boost in Q1 2021, on top of the 92% growth during Q1 2020. It also reported that NPS scores are “among the highest in the digital retail.”

So how is Kroger capturing both digital sales and customer approval? Personalization is one way. Kroger made more than 258 billion personalized recommendations to its customers through its digital experience in Q1 2021.

“Kroger’s data and personalization capabilities will contribute to increasingly meaningful ways to grow our e-commerce reach and capabilities, and we continue to elevate our personalized customer experience with our data today,” said CEO Rodney McMullen.

The retailer has also noted two key drivers of long-term digital profitability are the cost to fill a digital order and the retail media revenue generated from a digital transaction. In the first quarter, Kroger reduced the amount of time taken to pick a digital order by 5% and increased media revenue per digital basket by 33%.

The retailer also expanded to 2,233 Pickup locations and 2,488 Delivery locations, covering 98% of Kroger households. It increased capacity for Pickup by 15% with focus on adding high-demand time slots.

And big in the news, Kroger opened its first two long awaited Kroger Delivery facilities powered by Ocado in Monroe, Ohio and Groveland, Florida, a new geography.

“Launching in a new geography is incredibly exciting and a milestone moment in our history. Our Kroger Delivery team is ready to bring fresh, affordable food and a consistent customer experience directly to the doors of our customers,” said McMullen.

Looking ahead, Kroger has launched a digital farmers market pilot, creating an e-commerce marketplace that connects local farmers and businesses to customers seeking fresh and delicious products.

"Kroger is even better positioned to connect with our customers than we were prior to the pandemic as a result of our relentless focus on leading with fresh and accelerating with digital,” said McMullen. "Kroger's strong execution delivered identical sales results in the first quarter that exceeded our original expectations. Customers are responding to the investments we have made in digital, as evidenced by our triple-digit growth in digital sales since the beginning of 2019. We were disciplined in driving costs out of the business and we achieved record growth in Kroger's alternative profit business, demonstrating the power and attractiveness of our long-term model.”

The company raised its guidance based on the strength of these results.

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