Retail grocery giant The Kroger Co. plans to invest big in its employees and self-checkout, and it could put its c-store division up for sale.
Those were among the takeaways from Cincinnati-based Kroger’s annual investment conference Oct. 11, where the company laid out its “Restock Kroger” plan for growth.
Kroger expects the plan to generate $400 million in incremental operating margin and more than $4 billion of free cash flow by 2020. That cash flow would be almost double what was generated in the past three years.
One priority of Restock Kroger will be to invest more resources in its employees. The company plans to spend $500 million over the next three years on pay and benefit rebalancing, certifications, performance incentives, career opportunities, training and other human capital investments.
Also on tap is big growth in self-checkout capabilities. Kroger plans to expand self-checkout from its current 20-store pilot to 400 stores in 2018.
The company also announced at the conference that it could sell its c-store business, which generated $4 billion in revenue in 2016.
Restock Kroger also will put more emphasis on data, digital offerings, space optimization, smart pricing, alternative revenue streams and private label.
"We understand that today's marketplace is shifting rapidly,” says Rodney McMullen, Kroger’s CEO. “ Kroger's success has always depended on our ability to proactively address changes by focusing relentlessly on our customers. We have the scale, the data, physical assets and human connection to win.”