The Kroger in Newport, KY started limiting customers in store among other safety precautions already in place.

Cincinnati Enquirer

In the last 12 months, Kroger has done more business selling groceries online than Levi Strauss did selling blue jeans or Harley-Davidson did selling motorcycles.

Kroger told Wall Street analysts in its latest quarter digital sales were more than 7% of total sales – roughly $2 billion – in the 90 days ending June 30. Company officials have stopped short of spelling out their total digital sales volume as it has taken off in 2020, growing at 127% in the last quarter

But an Enquirer analysis of Kroger’s sales disclosures indicates Kroger’s digital sales –groceries bought online for home delivery or for pickup in a parking lot – hit roughly $5.8 billion in the last 12 months – large enough to be a Fortune 500 company.  

Further, the disclosures indicate Kroger’s digital sales could top $7 billion this year – making it as big as Cincinnati’s big financial firms Fifth Bank, Western & Southern or American Financial Group.

Kroger CEO Rodney McMullen credited the company’s robust digital business with helping drive overall growth – its online grocery business generated nearly one-third of the company’s growth in the latest quarter.

Chromebook, headphones, desks: COVID-era virtual school supplies come with real spike in spending

Another tech wreck looming?: Tech troubles in stock market invoke 2000 collapse

“Kroger’s strong digital business is a key contributor to this growth as the investments made to expand our digital ecosystem are resonating with customers,” McMullen told analysts.

So how does Kroger’s growing online grocery business stack up to its closest competitors? It’s unclear: Amazon doesn’t break out financial results for its food business. Walmart says its online U.S. sales were $21.5 billion last year, but that also includes general merchandise sales, such as furniture and lawn equipment.

Besides Kroger stores, the grocer operates several regional supermarket chains in 35 states, including Fred Meyer, Harris Teeter, Ralphs, Mariano’s, Fry’s, Smith’s, King Soopers, QFC and others. The company has nearly 2,800 stores and employs 540,000 workers.

The company’s second strong quarter during the pandemic prompted Kroger to boost its sales outlook for the year. While Kroger highlighted its growing digital business during its annual meeting in June, the company has hesitated until last week to count on the unit’s triple-digit growth to continue.

Kroger’s disclosures indicate total digital sales in 2019 were $3.9 billion. But the company’s 29% digital growth rate last year hit 92% in the first quarter and more than doubled in the latest.

Industry experts believe the pandemic has sped up America’s embrace of digital grocery shopping.

Kroger began a major push into digital shopping after Amazon suddenly became a direct competitor with its 2017 takeover of Whole Foods. The company’s stock price was hammered in recent years as heavy investments into technology sucked up cash and squeezed profit margins.

Kroger now says 98% of its customers have digital access to its groceries with 2,100 pickup locations and 2,400 delivery locations nationwide.

For the latest on Kroger, P&G, Fifth Third Bank and Cincinnati business, follow @alexcoolidge on Twitter.

Read or Share this story: