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Kroger excited about new presidential administration

11/11/2016


Will President-elect Donald Trump be good for Kroger’s business? The retailer’s stock has enjoyed a sharp rise since Trump was named the 45th president.


“Well, so far it certainly looks that way,” Kroger CEO Rodney McMullen said during an interview on CNBC. “We look forward to working with the administration and getting the growth again and more jobs started, so it’s exciting.”


McMullen said job growth is what he is looking forward to the most when the new administration gets to work in January. “One of the key things is creating stability and confidence to spend and invest for the future.”


However, there is one headwind standing in Kroger’s way. Food deflation, or a decline in the price of products, is a near-term challenge, McMullen said.


“If you look at the last 25 or 30 years, we’ve had three periods of deflation in grocery,” he said. “This is the third time. Typically it lasts three to five quarters and we’re in the middle of that process right now.”


McMullen added going through a period of food deflation is “no fun,” but Kroger will get through this period and continue to grow.


McMullen was also asked to comment about e-commerce in the grocery business.


“Online has been something that has been really important to us,” said McMullen. “We now have 531 stores with ClickList [an online ordering, pick-up-in-store service]. “We’ve had tremendous growth. It’s one more thing for customers to determine how to shop with us.”


In addition, McMullen was questioned about the competitive landscape, with a particular focus on whether Amazon’s previous announcement that it plans to enter the grocery and convenience store business is a threat to the Cincinnati-based retailer.


“We are so focused on understanding our customers and their needs and making sure we deliver against their needs,” responded McMullen. “Competitors will do all kinds of different strategies but what’s most important and what our associates do a great job of is focusing on that feedback from the customer and making sure we are delivering what they need.”


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