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Kroger (KR) on a Hiring Spree: What Else Should You Know?

Zacks

The Kroger Co. KR has been trying all methods to overcome competition, which has intensified with the foray of Amazon AMZN. The company’s latest initiative is the hiring drive for its family of stores in the supermarket division to better serve customers. The company will hire 11,000 employees, including 2000 for managerial roles. In the past two years, the company has created 22,000 new jobs.

The hiring spree reflects on the company’s expansion strategy and its focus to adapt to the challenging retail scenario by improving customer satisfaction. Of late, the company has undertaken several initiatives to boost its top-line in the current scenario of volatility in food prices and tough promotional environment.

The companyis expanding store base, introducing new items, digital coupons and ‘order online, pick up in store’ initiative. The company’s “Restock Kroger” program is gaining traction.As a part of this program, Kroger will invest an additional $500 million toward associate wages, training and development over the next three years.


Moreover, Kroger is looking to expand its “Scan, Bag, Pay & Go and Self-CheckOut” program — piloted at 20 stores — to nearly 400 locations in 2018. Meanwhile, Kroger’s Customer 1st strategy, which enriches consumers’ shopping experience, is benefiting the company. We believe that such operational strategies present enormous opportunities to augment identical supermarket sales, alleviate margin pressure and enhance return on invested capital. Management projects fiscal 2018 identical supermarket sales growth, excluding fuel, in the range of 1.5-2%.

Wrapping Up

Kroger, which shares space with Walmart WMT and Target TGT), is leaving no stone unturned to attract consumers and boost revenues. We believe that these strategies are likely to bolster the company’s performance and drive the stock further. In the past six months, shares of this Zacks Rank #3 (Hold) have returned 11.7%, outperforming the industry’s rise of 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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