Kroger's Overhaul Isn't Going As Planned
Kroger is slowing down its business plan after its attempt to sell new products and renovate stores did not produce expected profits, according to The Wall Street Journal.
Kroger is the largest supermarket chain in the U.S., but last month laid off almost 1,000 managers and employees to cut costs. The company is planning to slow down refurbishing stores to focus on driving sales from the stores that produce 75 percent of sales.
“It took us too long to do it. We put too many things on our stores to execute,” Chief Executive Rodney McMullen said. The company is struggling to balance advancing its stores and e-commerce operations while monitoring pressure on prices.
In 2017, Kroger developed a plan to increase sales after it experienced over 10 years of stagnant growth. Since then, the company has overhauled stores and increased investments. The plan was estimated to cost around $9 billion and projected operating profit would be $400 million by 2020.
Kroger has only remodeled 20 percent of its stores and the increase in profit has not met expectations. In September, the company pulled its 2020 profit guidance.
Kroger is slowing down its business plan after it did not receive its expected profits.