Call it deflation.
One of the country’s largest grocers, Kroger, is slashing prices to lure inflation-ravaged customers from Walmart, Costco and other high-value grocery giants.
CEO Greg Foran hopes these proposed price cuts will help give value-conscious customers reeling from surging gas prices, economic uncertainty, and other effects of inflation a bit of a breather when making their weekly grocery run.
“I think about our business a bit like a Formula One race,” he told Bloomberg.“There’s a lead group of cars that are doing a very good job. Our objective is to get out of the midfield and start lapping faster, make up the gap on the first-group cars and then ideally pass them.”
According to the retail bigwig, the proposed price cuts would affect thousands of items, marking Kroger’s largest strategic shift in years.
To do this, the grocery giant would need to import goods straight from the source, integrating tech more seamlessly and allocating savings toward slashing prices — although he declined to specify the amount of the cut.
Kroger, which generates nearly $150 billion in yearly revenue, will do a dry run of these price cuts before rolling them out across stores.
Foran said that the “basket has to come down” as “not everyone’s basket is the same,” which means price shifts will be on thousands of products, and “it has to be something that passes the common-sense piece with customers,” the grocery boss declared.
In doing so, he hopes Kroger, the largest supermarket chain in the US, which generates nearly $150 billion in yearly revenue, would be able to stay competitive in a grocery scene where stores that offer value products are edging out higher-priced rivals.
This comes as the company has already lost ground to retailers like Walmart and Costco, where cash-strapped middle-class customers feel like they can get more bang for their buck.
Slashing prices is just one part of Kroger’s plan to attract customers, however. They have also pledged to make in-store service friendlier and faster and sport offerings that reflect the neighborhoods they’re in.
But the grocery store competition is fierce as Walmart is notably slashing prices on over 7,200 items — a 20% reduction from a year ago.
On a more local level, Stop & Shop is slashing prices at its New York-area stores, making local staples like bagels and smoked salmon 23% cheaper than usual to mitigate the effects of inflation.
Meanwhile, Costco continues to woo customers with low prices and bargains on bulk items.
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