CINCINNATI — Same-store sales at Kroger supermarkets surged 30% in March as many shoppers stockpiled supplies to hunker down at home and stem the spread of the coronavirus (COVID-19). The demand was broad-based across grocery and fresh departments, both in physical retail stores and digital channels, according to The Kroger Co., which provided a business update in a Form 10-K filing on April 1 with the US Securities and Exchange Commission.
Looking ahead to the rest of the year, however, management is bracing for potential supply chain disruptions, increased costs, reduced workforces, temporary store closings and reduced consumer traffic and purchasing due to illness, quarantine or financial hardship. The duration of such impacts cannot be predicted due to the evolving nature of COVID-19. As a precautionary measure, Kroger said it borrowed $1 billion under its revolving credit facility on March 18.
“We are seeing strong sales and are at the same time investing in our business to support our customers and associates through the current uncertainty,” said Gary Millerchip, chief financial officer.
Kroger said it is offering increased compensation for frontline hourly associates, providing expanded paid sick leave and hiring a record number of new associates. Additionally, the company is investing in safety and sanitation protocols throughout its operations and in its supply chain to expand capacity where possible.
“Kroger’s most urgent priority is to provide a safe environment for associates and customers, with open stores, comprehensive digital solutions and an efficiently-operating supply chain, so that our communities have access to fresh, affordable food and essentials,” said W. Rodney McMullen, chairman and chief executive officer. “We are so proud of our dedicated associates who are on the front lines serving our customers when they need us most. A huge thank you to all of our associates, whose efforts are nothing short of heroic.”
Management has reaffirmed its full-year guidance, targeting more than 2.25% growth in identical supermarket sales excluding fuel and adjusted earnings per share ranging between $2.30 to $2.40, up from $2.19 the year before.