Kroger Reports 11% Growth in Digital Sales in Q4
Kroger saw growth in digital sales, employees’ use of artificial intelligence (AI) tools and the benefits of personalization during its fourth quarter, which ended Feb. 1, executives said Thursday (March 6) during the grocery giant’s quarterly earnings call.
The company saw 11% growth in digital sales during the fourth quarter, outpacing its 2.4% growth in overall identical sales, according to a Thursday earnings release.
For the full year of its fiscal 2024, digital sales accounted for $13 billion of Kroger’s total company sales of $147.1 billion, per the release.
“We are encouraged by our fourth quarter results, which delivered the best digital profit improvement quarter we’ve seen yet,” Kroger Interim Chief Financial Officer Todd Foley said Thursday during the company’s quarterly earnings call.
Foley added that digital is an “important growth accelerator” for Kroger because the company has found that digital households are more loyal and spend nearly three times as much as non-digitally engaged households.
AI tools are an important part of Kroger’s productivity initiatives, and the company added two such tools in 2024, Foley said during the call.
One is an AI-powered tool that uses real-time sales and shipment data to help associates manage inventory, while the other is an AI-powered virtual assistant for associates that provides personalized service for things like onboarding, training and human resources (HR) interactions.
“Today, almost 70,000 associates engage with this tool for more than 70 use cases,” Foley said during the call.
Kroger also made gains in its personalization efforts in 2024. The company delivered a 10% increase in digital coupon savings for its customers and enhanced its Boost membership benefits by adding Disney streaming options, according to an earnings presentation released Thursday.
“Offering fresh, high-quality products with personalized offers through a unique, seamless shopping experience led to strong customer engagement trends, including growth in both households and loyalty,” Foley said during the call.
Looking ahead, Kroger expects to see identical sales without fuel grow 2% to 3% in 2025, according to the earnings release.
“We delivered solid results in 2024, and our performance improved throughout the year,” Chairman and CEO Ron Sargent said during the call. “Looking to 2025, we have aggressive plans to build more stores and improve our share results, attract new households, and increase loyalty, which will accelerate growth and create shareholder value.”
Sargent delivered these remarks three days after being appointed to serve as chairman and interim CEO after the Monday (March 3) resignation of previous chairman and CEO Rodney McMullen. Prior to that, Sargent was the company’s lead director.
During the call, Sargent said the board has formed a search committee and begun the search process for a new CEO.
“But I think most importantly, we’re focused on identifying the right leader to drive Kroger’s growth and enhance shareholder value,” Sargent said.
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