Kroger unveils plans to test market home delivery via driverless cars.
Alexander Coolidge, email@example.com
Kroger shares tumbled Thursday after its fourth-quarter profit disappointed investors amid the company’s battles with Amazon and Walmart for grocery pickup and delivery supremacy.
Kroger shares closed at $25.61 Thursday – down $2.83 or 10 percent.
The nation’s largest supermarket chain is waging a war on two fronts: cutting food prices at the same time it spends heavily in digital strategies designed to compete for customers who increasingly want to skip the trip to the store.
The Cincinnati-based company has expanded parking lot pickup or home delivery to 91 percent of the households it serves. It is also beginning to build robotic warehouses across the country that will beef up home delivery further through a partnership with the U.K.’s digital grocer Ocado.
Kroger even has a pilot in Arizona with a robotic delivery driver filling home delivery orders.
Investing in tech and in lower food prices at the same time hit Kroger’s fourth-quarter gross profit margin: shaving almost an entire point down to 22 percent. That was enough to evaporate $261 million in gross profit.
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The supermarket retailer posted a $259 million profit, down 69 percent from $854 million last year (which was greatly helped by the Trump tax cut). Total sales hit $28.1 billion, down 9.5 percent (largely reflecting last year’s sale of its convenience store business).
Excluding last year’s tax windfall, Kroger’s profit still slid 19.3 percent, while its sales excluding the divestiture rose 1.6 percent. For the 2018 fiscal year, Kroger posted a $3.1 billion profit on $121.2 billion in sales.
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