Kroger Loyal Household Growth Boosts Q2 Same-Store Sales 2.7 Percent

Supermarket retailer Kroger is focusing intently on growing its loyal household base, and it is using shopper behavior data gathered through its customer loyalty program to accomplish this goal.

During a call discussing financial results for its second quarter of 2010, which ended August 14, 2010, president and COO Rodney McMullen said "Our strong partnership with [loyalty program partner] dunnhumby allows us to use shopping behavior data from our loyalty cards to create specific offers and savings for individual households. This enables Kroger and our family of stores to reward our best customers for their increased loyalty."

Kroger's second-quarter sales were $261.6 million, a 2.8% increase over the $254.4 million in sales during the same period last year. Excluding sales of fuel, comp store sales increased 2.7% during the quarter, representing solid performance in the competitive, thin-margin grocery sector.

McMullen stressed the importance of these top customers to Kroger: "Loyal households represent our very best customers. We define them based on several factors including total basket and frequency of purchase. Our loyal household growth grew at a faster rate than total household account. Loyal households visited our stores more frequently and purchased more items from us than they did this time last year,” he noted.

"This is a very important trend," McMullen added. "We believe this outcome is a reflection of our Customer 1st Strategy, which is designed to reward our loyal customers and not cherry pickers who simply shop various outlets based on the lowest available price."
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