The Kroger Co. is forecasting a rosier year after its customer-loyalty programs helped boost net income in the first quarter.
The nation's largest traditional grocery store chain said Thursday that its targeted discounts and coupon mailings, which are based on purchase histories, is helping increase the number of customers who return to its stores.
The aggressive courtship comes at a time when Kroger and other supermarkets and big-box retailers are struggling to manage their costs for products, which have ballooned as a result of higher fuel and commodity prices. Rather than taking the risk of scaring off customers by passing on those costs entirely, Kroger is focusing on cutting expenses and boosting traffic in its stores.
The strategy is paying off for the Kroger, which operates Ralphs, Food 4 Less and Fred Meyer. Kroger said its "loyal households," which the company defines based on shopping patterns, grew in the quarter. These shoppers were buying fewer items per trip, but visiting more often and ultimately buying more than they did in the year-ago period.
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