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04/22/2019

Report: Kroger struggling with grocery transformation

CEO Rodney McMullen tells the Journal that he knows it is a pivotal moment for the company and that investors are concerned.

Kroger is still trying to catch up with its competitors when it comes to online grocery retailing.

According to the Wall Street Journal, the transition has proven rough for Kroger, which stayed focused on physical store sales long after mass-merchant competitors were investing in online-ordering technology and delivery services.

CEO Rodney McMullen tells the Journal that he knows it is a pivotal moment for the company and that investors are concerned. “We’ve got to get our butts in gear,” he said in an interview with the Journal. “There was no doubt we were behind.” He said he believes Kroger executives have devised a plan to help it grow again.

Executives have debated which investments to make and how drastically to change the company’s business model.

The company has budgeted $4 billion for investments in an attempt to catch up to the latest convenient trend, including warehouses managed by robots, a meal-kit company and digitally enabled shelves that market products to customers through LED displays, according to the article. Last year, it formed a partnership with an autonomous-vehicle startup, Nuro Inc., and started selling its line of natural and organic products on Alibaba Group Holding Ltd.’s T-mall site in China.