Kroger Says Inflation Is Pushing Shoppers Toward Cheaper Store Brands

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(Bloomberg) — Kroger (NYSE:) Co. said grocery stores are “aggressively” turning to lower-cost store brands as they grapple with the highest inflation rate in four decades.

Same-store sales for Kroger-branded products rose 6.3% in the first quarter, outpacing overall sales growth, the company said during its earnings call on Thursday. Customers facing higher prices everywhere from the gas pump to the checkout “are actively looking for ways to save,” Chief Executive Officer Rodney McMullen told analysts on the call.

Kroger’s comments stand in stark contrast to the tone of late from consumer giants like Procter & Gamble (NYSE:) Co., who say they haven’t seen buyers trade in meaningfully to stock brands.

Kroger said it has also seen a drop in the number of items shoppers buy during a typical shopping trip, though that’s partly due to some shoppers buying in bulk. Customers are also coming in more often than before, the company said.

Groceries rose 11.9% from May last year, the most since 1979, data from the Labor Department shows.

©2022 Bloomberg LP



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