The Kroger Co. (NYSE:KR) Q1 2019 Earnings Conference Call Transcript

Jun 20, 2019 • 10:00 am ET

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The Kroger Co. (NYSE:KR) Q1 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Robby Ohmes with Bank of America Merrill Lynch. Please go ahead.

Analyst
Robby Ohmes

Well, thanks. Good morning, guys.

Executive
W. Rodney McMullen

Good morning.

Analyst
Robby Ohmes

Rodney, my question is, could you talk a little bit about, now that you're quarter into this year, how your price investment plan is trending? Is it more or less than what you were expecting? And maybe remind us what kind of price investment year 2019 is expected to be? And maybe weave that into how that plays out into the expectation for accelerating IDs?

And then also maybe weave in just -- the environment you're seeing out there competitively. We're seeing signs of the promotional environment in produce being a little more aggressive than it's been in a while. If you could weave the picture together for us, that would be great.

Executive
W. Rodney McMullen

Okay. Thanks, Robby. If you look at price investments overall, we're tracking really pretty consistent where we expected it to be. We are continuing to cycle the investments we made during last year. So the flow-through of that will continue to be helpful. If you look at the '19 investments, it would be a reasonable amount. It would not be as much as what we did in '18. Because as you recall, when we had the tax law changes, we accelerated some of our '19 investments into '18 to give customers some of the value from the lower tax rate.

When you look at the environment overall, there's always puts and takes. And overall, we would say it's pretty consistent with where it was before. You will always see a specific area or category get more. But when you look at it, all in all, it looks pretty consistent with before. On accelerating the identicals, it really is one of the things on space optimization. Now it's becoming a tailwind versus a headwind.

Obviously, that's been -- has taken us longer than we expected, so that's been a positive. Just in terms of basic execution in the stores, our teams are doing a great job of improving the customer experience, which is adding momentum as well. And it's making sure that we use our data to target the right things to work on. So, it's all of those things coming together and then being a little bit better at telling the customer our story.

Analyst
Robby Ohmes

Terrific. Thanks so much.

Executive
W. Rodney McMullen

Thanks, Robby.

Operator
Operator

The next question comes from Judah Frommer with Credit Suisse. Please go ahead.

Analyst
Judah Frommer

Hi. Thanks for taking the question. Maybe first just a follow-up on IDs. Can you help us with the cadence throughout the quarter? It sounded like when you gave the quarter-to-date update with fourth quarter earnings that you were running better than where you finished the quarter and obviously, things are expected to accelerate. So beyond remodels, has there been enough contribution from the rollout of online grocery and the impact of inflation relative to your expectations?

Executive
W. Rodney McMullen

Inflation was higher in the first