Kroger Co.’s new chief executive officer is looking at big price cuts in order to win back market share and take on his former employer, Walmart Inc., and other competitors.
The largest US grocery company, which owns 21 chains including City Market and Fred Meyer, is laying the groundwork for lower prices across product categories, CEO Greg Foran told Bloomberg News in his first interview since taking the role in February. Management is currently making plans to test price cuts and then phase them in.
Kroger is looking to compete more fiercely with Walmart and other companies that have gained ground in recent years at the expense of traditional grocery operators. Across food retail, businesses emphasizing value are outperforming those seen as offering higher prices, Foran said, pointing to Walmart, Costco Wholesale Corp., Trader Joe’s, Aldi and Amazon.com Inc.
In addition to cutting prices, Kroger is working to make service in stores friendlier and faster. It also wants to accelerate new store openings.
Retailers, especially grocery chains that operate on relatively thin margins, typically don’t disclose their tactics to lower prices for merchandise. Walmart said Thursday that it’s cut prices on about 7,200 items, up more than 20% from a year ago. The world’s largest retailer said low prices are helping it gain market share across income levels.
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