The Kroger Co. (NYSE:KR) Q1 2016 Earnings Conference Call - Final Transcript
Jun 16, 2016 • 10:00 am ET
(Operator Instructions) Ed Kelly, Credit Suisse.
Could we maybe start off with just color on the cadence of the IDs through Q1, what you're seeing so far in Q2? And then, Rodney or Mike, could you maybe dissect sort of like tonnage trends versus inflation trends? And then, lastly, as part of all this, the impact that Roundy's had on the Q1 comp?
Ed, I'll start out and let Mike fill in. But if you look across the quarter, I would say it bounced around a bit. Part of that was driven by weather. Earlier in the quarter, we had basically no weather benefits this year versus a lot in the prior year. As you get toward the end of the quarter, Memorial Day moved from the first quarter to the second quarter and early in the quarter, you had Super Bowl. So there's a lot of things going on.
The other thing on inflation -- inflation, we had expected that it would start picking up some and when we look going forward, we just don't see that picking up. If you look at so far this quarter, we're inside the range, just slightly below the mid point of the range of the 2.5% to 3.5%. But as you know, it's still very early in the quarter. Overall, the core continues to be strong and we're cycling incredibly strong numbers from last year and tonnage continues to be solid. I don't know, Mike, anything else you would want to add or thoughts?
No. One of the things we have done is if you look at our real growth, that's IDs minus the inflation number that we give, if you look at a two-year stack of that, it's amazingly consistent quarter to quarter, less than a 50 basis point swing when you look at it over the last five or six quarters. So when you look at things over a little bit longer time frame and you take out the effects of inflation on the reported numbers, our results have actually been amazingly consistent.
And Mike, just on the impact of Roundy's on that 2.4% that you report this quarter?
It's about 30 basis points.
John Heinbockel, Guggenheim Securities.
I know it's still early with Click List in some markets, but what have you seen thus far in terms of how that's changing consumer behavior? And is it yet a new customer acquisition vehicle?
As you started out your question, it's obviously very early. And as I mentioned in the prepared comments, we're now in 25 markets. What we're finding is almost anything you say would be correct, so there are some new customers. And we find in some situations a customer will spend more with us.
But as you know, we're so focused on what the customer wants and needs are, and what we have is some of our customers tell us they really appreciate it and that's really why we're focused on it and continue to roll it out because