Dive Transient:
- Kroger will proceed investing in AI as instruments allow higher product visibility and productiveness, resulting in lowered stock loss or shrink and improved expertise retention, executives mentioned throughout the grocer’s Q1 earnings call in June.
- “We’ve seen good progress [around shrink],” SVP and CFO David Kennerley mentioned throughout the name. “What we actually attribute this to is we have made some investments in some AI-enabled expertise and deployed new processes round that expertise.”
- The corporate additionally launched a digital AI assistant for its associates, which it partly credited for document ranges of retailer and firm retention throughout the quarter. “When our associates keep longer, they study extra, tackle extra duties and ship a greater buyer expertise, which ends up in higher gross sales,” mentioned interim CEO Ron Sargent.
Dive Perception:
Kroger is doubling down on AI whereas holding savings top of mind, becoming a member of a cost-conscious group of businesses making related strikes.
The grocery store will shut 60 underperforming stores by the tip of subsequent 12 months because it reassesses capital allocation and “aggressively” finds methods to scale back prices all through the corporate, in line with the earnings name.
Kroger sees AI and different applied sciences as a part of the answer, too.
“The opposite factor that may also contribute in the direction of higher price efficiency is what I name methods of working and course of enchancment,” Kennerley mentioned. “There’s loads of alternative right here to work smarter, extra effectively, extra tech-enabled, and we have already acquired some good proof factors on that.”
Excluding gas, identical-store sales ticked up 3.2% throughout Q1 2025, which ended Might 24, in contrast with the identical interval final 12 months. Kroger characterizes a retailer as equivalent if it operates with out enlargement or relocation for 5 full quarters.
Kroger’s once-sought-after merger accomplice, Albertsons, has equally sharpened its technology focus whereas eyeing cost-saving measures.
“Our North Star is to make use of expertise in every part that we do,” Albertsons CEO Susan Morris mentioned throughout the firm’s This fall 2024 earnings report in April.
As a part of the technique, the Idaho-headquartered grocer plans to extend AI use to reinforce product high quality and monitoring for freshness because it appears to be like to drive greater gross sales and higher buyer experiences.
The efforts additionally align with Albertsons’ three-year plan to cut $1.5 billion in costs that rolled out after the merger failed.
