“Through the Restock Kroger framework and intensity around operational excellence, we are achieving cost savings of over $1 billion each year and are investing savings back into the business with an emphasis on the customer and associate experience,” Kroger chairman and chief executive officer Rodney McMullen said in a statement. “We are improving the customer experience by widening and deepening our competitive moats that include fresh, seamless, personalization and Our Brands. These moats are strong today and growing in relevance as customers eat more food at home. We are improving the associate experience by focusing on talent, culture and wage investments. We are living our purpose through our commitments to a world with Zero Hunger | Zero Waste and our framework for action to advance diversity, equity and inclusion in our business and communities.
“We are creating shareholder value by executing our strategy. We have returned approximately $6.4 billion to shareholders via dividends and repurchased shares since the beginning of fiscal 2017. Kroger is growing market share and our Total Shareholder Return has outperformed the market and our peer group over the last 12 months. And we are incredibly excited for the future.”
Kroger said its capital allocation strategy is to use its adjusted free cash flow to invest in the business and drive profitable growth while also maintaining its current investment grade debt rating and returning capital to shareholders. On September 11, the company’s authorized a $1 billion share repurchase program, replacing the prior authorization. And earlier this year Kroger increased its dividend by 13%, marking the 14th consecutive year of dividend increases.
“Prior to the pandemic, Kroger’s early results in 2020 were strong and while the pandemic has clearly been a tailwind to our business, we’ve been very pleased with the underlying progress with all key components of our model, including sales and market share growth, cost savings initiatives and growth in alternative profit streams,” said Gary Millerchip, Kroger’s chief financial officer. “Based on the strength of our execution against our competitive moats, our food expertise, unparalleled data-insights and expected structural shifts to food consumption at home as a result of COVID-19, we believe Kroger is well positioned to continue to differentiate and grow in the future. One year on from announcing our Total Shareholder Return target, we are well positioned to deliver on this commitment.”