FOX Business’ Lydia Hu analyzes the impact of inflation on food costs, and FOX Business’ Connell McShane shares social media memes inspired by rising prices.
Kroger CEO Rodney McMullen said Monday that the company is working with its manufacturers on how they can work together to cut costs while its customers remain under financial pressure.
“About half of our customers are under a lot of pressure from a financial perspective … their wages haven’t kept up with the inflation they’ve caused,” McMullen said during a keynote session at NRF 2023: Retail’s Big Show in New York on Monday.
| Ticker | Security | Last | To change | Change % |
|---|---|---|---|---|
| KR | KROGER CO. | 45.22 | -0.45 | -0.99% |
McMullen said the company is always thinking about how to make things affordable for its customers, especially as they continue to be pressured by inflation, which he predicts will moderate or subside towards the end of the year.
“Our expectation is that later in the year you start to see fairly moderate inflation or steady inflation,” McMullen said. “We still don’t see much deflation right now.”
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As the next batch of hens come in and lay eggs, “you should start to see a drop in a few categories, but not a lot.”
Egg prices have risen significantly in recent months due to a prolonged bird flu epidemic combined with huge feed, fuel and labor costs.
While inflation fell to 6.5% in December from a year earlier, marking the sixth consecutive year-on-year slowdown, it remains around three times higher than the pre-pandemic average, underscoring the ongoing financial burden placed on shoppers.
Rodney McMullen, president 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 drive costs and lower prices for customers.
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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 on Oct. 14, 2022, in Atlanta. (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.
“Every store that we keep, we know we’re going to start lowering prices on day one,” McMullen said during a keynote session at NRF 2023.
McMullen said the company has cut prices by more than $5 billion annually since 2006.
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“If you do what’s right for the customer, do what’s right for associates and support your communities, shareholders benefit from that,” he said.
Meanwhile, the company says it’s relying on electric coupons to help customers stretch their budgets.
Kroger CEO Rodney McMullen says the company is working with its producers on how they can work together to cut costs while its customers remain under financial pressure. (Jakub Porzycki/NurPhoto via Getty Images/File/Getty Images)
But he also noted that in some areas its own brands are “gaining significant share” of the market, according to McMullen.
“What we’re finding is that customers have switched to our brands, initially to save money … once they switch, they stay with us, even when their budgets become a little less strained,” he said.
FOX Business Megan Henney and The Associated Press contributed to this report.