One of the leading and known name in the list of top companies Kroger is losing its charm. According to one analyst which found that Kroger falls short of most of its competitors in fascinating new customers throughout the epidemic and its potential ability to retain customers. More details below!
Recently, the study which was conducted on the store’s sales and updating policy strategies to attract clients showed that the nation’s largest traditional supermarket worker had the lowest percentage of new customers for a group of 25 retailers studied by Michael Montane, an analyst at Evercore ISI. This included supermarket operator Albertsons as well as rivals Walmart, Target, Amazon, and Costco.
This research showed that only 2/3rd comes back to the store, while their competitors are doing new marketing to keep up with the clients. These trends played a major role in prompting Montane to downgrade his investment rating in Kroger stock to “inline”, equivalent to “retaining” it’s previous “outperforming” rating. Montagne also reduced his 12-month share price for Kroger shares to $36 from $40.
While, the Kroger stock was up 63 cents, or 2%, to close Thursday’s trading at $32.72. In the report, it is highlighted that the danger to Kroger that competitive pressures, including those stemming from the new Walmart and Walmart + membership program as well as Amazon Prime, could hurt Kroger’s prospects. He feared that Kroger would be caught “at the crossover sign Plus versus Prime.”
The official statement is as following “Our survey results combined with Walmart + analysis indicate that there are better prospects elsewhere in food retail, we recommend moving Kroger earnings (stocks) to Albertsons to high-value investors who want to play the groceries, and for those wishing to pay an Amazon / Costco premium looking at constructive survey results and loyalty models.”
In response to this report, Kroger’s CEO Rodney McMullen said that Kroger has gained market share throughout the pandemic and gained new shoppers. I also took additional steps to keep these shoppers.
He further said that “Perhaps the biggest change in the past is that the new customer should gain the right to start receiving loyal customer mailing and digital offers,” McCullen said during a conference call in September to discuss the second-quarter earnings. “We started treating customers like loyal shoppers immediately instead of waiting for them to interact with us for a while. What we discovered is that we managed to retain these customers and repeat purchases as well.” Now, they are doing improvement and we also heard that they will be hiring new employees as well in the coming festive season. Let’s see how they will take their game up as the competition is too high! Comment below to let us know your thoughts!