In a quarterly earnings conference call Sept. 12, president Rodney McMullen and chief executive officer David Dillon reported the company is boosting the low end of its growth guidance projection to 3% for this fiscal year, up from 2.5% projected earlier this year.
Although the company does not break out numbers specific to fresh produce sales, McMullen said the chain is seeing significant growth.
“We are adding organics, shortening our supply chain and significantly increasing our locally grown offerings,” McMullen said. “And we are doing a good job telling our customers about that.”
McMullen said he believes there is enough growth potential in the fresh produce sector that Kroger — and its competitors — have opportunities for increased sales.
Total sales for Kroger Co. in the second quarter were $22.7 billion, compared to $21.7 billion during the same time frame in 2012, according to the company. Net earnings for the second quarter are $317 million, compared with $279 million for 2012’s second quarter.
McMullen said data shows customers are visiting Kroger stores more frequently.
“They purchase fewer items per trip (but) buy more on a monthly basis,” McMullen said. “Total units sold were up compared to last year. We estimate the rate of product cost inflation at 1.6%, excluding fuel and pharmacy.”