CINCINNATI — Many of the volume growth headwinds that have plagued consumer packaged goods companies the past few years also have affected retailers. In the year ahead, The Kroger Co. is expecting positive unit volume growth as consumer economic sentiment improves and as industry investment in promotional trade spending grows.

“In 2023, our customers clipped 4 billion coupons, which is 1 billion more coupons compared to 2022,” said William Rodney McMullen, chairman of the board and chief executive officer, during a March 7 call with securities analysts. “We know these offers help customers stretch their budget and lead to deeper loyalty. During the fourth quarter, our effective promotions helped turn traffic positive.

“These trends position us well and give us optimism for 2024. We expect consumer sentiment to improve in 2024 but our customers will still have to manage many of the same macro pressures as last year.”

McMullen added that trade support from CPG’s picked up as the year progressed.

“It's more around some of the CPGs are starting to focus more on tonnage growth than what they have in the last several quarters,” he said.

For the year ended Feb. 3, Kroger recorded net income of $2.16 billion, equal to $2.99 per share on the common stock, and down slightly from the year before when the retailer earned $2.24 billion, or $3.10 per share.

Annual sales were $150 billion in fiscal 2023, up from $148.3 billion the previous year.

“Last year, customers were affected by many factors, which pressured their food at home spending, including reduced government benefits such as SNAP, higher interest rates and the depletion of excess savings that many families accumulated during the pandemic,” McMullen said. “As a result, customers were looking for value to stretch their budgets.”

In fiscal 2024, Kroger is guiding identical sales growth, without fuel, in a range between 0.25% and 1.75% compared to fiscal 2023. Adjusted earnings per diluted share are expected in a range between $4.30 and $4.50. Adjusted earnings per share in 2023 was $4.56, according to the company.

“We expect adjusted net earnings per diluted share in quarter one will be down low double digits year-over-year, reflecting our most challenging quarter for sales growth,” said Todd A. Foley, interim chief financial officer. “Quarter two is expected to be relatively in line with last year. Quarter three, we expect to ease double digits compared to last year, and quarter four is expected to be in line with last year.”