Rodney McMullen may largely keep his sights set on the grocery business, but his influence permeates well beyond the edges of the vertical. Kroger’s sale of its $4 billion c-store business in February 2018 was the most anticipated industry news of the new year. The biggest surprise? That the buyer was an industry outsider: EG Group, a U.K.-based c-store retailer.
McMullen started at Kroger as a stock clerk and bagger and climbed the executive ladder from senior vice president in 1997 to president and chief operating officer in 2009 and, currently, chairman and CEO. Like any astute retail exec, McMullen and his team are fighting a war for the consumer dollar on multiple fronts. Kroger has launched the Hospitality Division, responsible for its Prep + Pared meal-kit line, a culinary training center and Kitchen 1883, its first stand-alone restaurant. Opened in December 2017, Kitchen 1883 greeted guests in Union, Ky., with reported waits of an hour.
And while the combination of deflation and heightened competition interfered with Kroger’s remarkable streak of same-store sales gains, the retailer didn’t stay down for long. In November, it announced it outperformed expectations in the third quarter, and its stock price rose 6%. McMullen in a conference call said the results gave indication that the “Restock” plan—a three-year, $9 billion initiative designed to “redefine how America eats”—was already helping to generate improvements. The sale of its c-store assets would help fund the Restock initiatives.
The Restock plan itself is a case study in how a traditional operator heaves itself into the 21st century. Its ClickList experience is the retailer’s attempt to create a “seamless” environment in which customers can choose how they engage with the store and online via click-and-collect, delivery, in-store experiences, recipes, digital coupons, weekly ads and shopping lists. At the close of 2017, Kroger had introduced 1,000 stores to ClickList.
Even though Kroger has exited the c-store channel, McMullen’s leadership will continue to drive change across the entire retail landscape.
13 years—Length of Kroger’s positive same-store sales streak before it fell below zero in first-quarter 2017. It got back in the black the next quarter.