Kroger posts annual sales gains of 6.4% to $122.7 billion
Kroger on Thursday reported net earnings of $854 million and identical supermarket sales, without fuel, of 1.5% in the fourth quarter of 2017, which ended on Feb. 3, 2018. Total sales increased 12.4% to $31 billion in the fourth quarter compared to $27.6 billion for the same period last year. Total sales, excluding fuel and the 53rd week, increased 2.7% in the fourth quarter over the same period last year.
“We launched Restock Kroger in the fall of 2017 and finished the year with positive momentum in our sales and overall business,” Rodney McMullen, Kroger chairman and CEO, said. “Customers are letting us know that they see, feel and appreciate our efforts to redefine the customer experience – and they are rewarding us with growing loyalty. This is the cycle that creates long-term value for shareholders. … As we embark on our first full year of Restock Kroger, we are encouraged at the start of 2018 and confident in our ability to deliver on both our plan for the year and our long-term vision to serve America through food inspiration and uplift.”
Some of the highlights for the year included $16.7 billion in annual sales of natural and organic sales, including $2 billion in Simple Truth sales; Kroger opened the Kroger Culinary Innovation Center in downtown Cincinnati and opened its 1,000th ClickList store; and Kroger hosted its second Natural Foods Innovation Summit to expand natural and local supplier offerings.
Net earnings for 2017 totaled $1.9 billion, or $2.09 per diluted share. Total sales increased 6.4% to $122.7 billion in 2017 compared to $115.3 billion in 2016. Excluding fuel, the 53rd week and the Modern Health merger, total sales increased 2.2% in 2017 compared to 2016.
Kroger is targeting identical supermarket sales growth, excluding fuel, to range from 1.5% to 2% in 2018. The company expects net earnings to range from $1.95 to $2.15 per diluted share.
WBA taps new CFO with pharma, CPG pedigree
Walgreens Boots Alliance on Thursday named James Kehoe, recently CFO and board director of Takeda Pharmaceutical, as the company’s executive vice president and global CFO, effective June 1. He will be based at the company’s headquarters in Deerfield, Ill.
“We are pleased to welcome James Kehoe to lead the Walgreens Boots Alliance global finance operations as the company now moves into our exciting future as a global leader in health and wellbeing,” Jim Skinner, Walgreens Boots Alliance executive chairman, said. “His significant leadership experience in both health care and consumer goods makes him an exceptional fit and addition to Stefano Pessina’s senior executive team and the company.”
Kehoe will succeed George Fairweather, who has served as Walgreens Boots Alliance global CFO since February 2015. Fairweather has been instrumental in the formation of Walgreens Boots Alliance, the subsequent integration of the legacy companies, the new enterprise’s major cost-transformation program and the establishment of the combined global financial organization.
Fairweather will become a senior advisor to CEO Stefano Pessina for business development and finance, also effective June 1.
“We are excited to have another world-class chief financial officer join Walgreens Boots Alliance and the senior management team to follow George. James’s extensive experience in finance in the pharma-related health care and consumer goods sectors, as well as helping ensure optimal business performance, will be instrumental as we move to the next phase of our long-term strategy for growth and value creation,” Pessina said. “After working and collaborating for over 16 years with George going back to Alliance UniChem, I want to extend my personal heartfelt appreciation for his invaluable leadership, counsel and significant contributions to our enterprise. He was indispensable to the formation of Alliance Boots and the successful creation of Walgreens Boots Alliance. Over the past three years, George has led key integration efforts, the successful cost-transformation program and the establishment of an outstanding global financial team and function.”
Kehoe has been CFO of Takeda Pharmaceutical since June 2016 and was based in Tokyo, reporting directly to the company’s president and CEO. He was appointed to the Takeda Pharmaceutical board of directors in June 2017. Kehoe is an accomplished finance executive from the consumer goods sector and a business leader with a track record of driving operational business performance.
Kehoe joined Takeda Pharmaceutical from Kraft Foods Group in the U.S., where he last held the role of executive vice president, CFO. Prior to that, he held a number of finance-related positions over 25 years with assignments based in Ireland, Germany, Italy, U.S., Austria, Switzerland and Canada.
“I believe there is no more important company at the junction of health care and retail than Walgreens Boots Alliance, and I am excited to be joining the team at such a pivotal moment in the company’s continuing transformation,” Kehoe said. “Moving forward, I appreciate that George will continue serving in an advisory role to help ensure a smooth transition and further success for the company.”
Target to expand several delivery services
On the heels of a strong performance sales-wise in its fourth quarter, Target announced a major rollout of several of its delivery services.
The retailer also announced it is raising its minimum hourly wage to $12 this year, part of its previously announced initiative to raise the minimum wage to $15 by 2020. The hike will start with existing associates.
On the delivery front, Target will expand “Drive Up,” its fastest delivery option, to nearly a thousand stores nationwide in 2018. The service, available through the Target app, allows shoppers to have their online orders brought out to their cars by a store associate within a couple minutes after arriving at the store.
In addition, the discounter also announced free two-day shipping on hundreds of thousands of items on Target.com with no membership required — an offer available when guests use their Target REDcard or spend more than $35.
Also, Target will expand its service that lets customers shop select urban stores and have their order delivered the same day for a flat fee. After last year’s successful pilot launch in four New York City stores, Target will roll out the service throughout the year to all stores in the five New York boroughs and select urban locations in Boston, Chicago, San Francisco and Washington, D.C.
Target is also expanding its “restock” overnight essentials delivery service. It will roll out in 2018 — to 40 markets total, covering nearly three-fourths of the U.S. population, by the end of the year.
“We’re always looking for ways to make it easier for our guests to get what they need on their terms,” said Mike McNamara, Target’s chief information and digital officer. “Thanks to investments in our supply chain and digital operations, we’re able use our stores to fulfill guests’ digital orders with flexibility and speed. With recent success, we’re eager to scale Drive Up and other fulfillment options to more guests in 2018.”
Target said it began testing its Drive-Up service last fall in the Twin Cities. With a nearly 10% increase in orders week over week since launch, it quickly became one of the highest rated fulfillment services shoppers in the area, the retailer said. Half of the shoppers that tried the service have used it again, according to Target.
The new service has been especially popular among shoppers with small children, with diapers and paper towels among the most ordered items through it. It’s also proven popular for purchases of bulky items, with cases of bottled water and soda, as well as home electronics like TVs, among the most ordered items.