Kroger experiences strong growth based on renewed customer focus

All types of industries can benefit from paying attention to customer satisfaction and loyalty strategies and restructuring them when appropriate. Recently, one major food provider illustrated this principle.

All types of industries can benefit from paying attention to customer satisfaction and loyalty strategies and restructuring them when appropriate. Recently, one major food provider illustrated this principle.

Kroger sees boost in first quarter

Kroger, the nation's largest traditional grocery store chain, announced that its net income for the first quarter improved, rising from $27.46 billion in total revenue to $28.06 billion, the Associated Press reports.

Some of the improvements have occurred as a result of administrative decisions. For example, the grocery chain reduced its operating, general and administrative costs. In the same quarter last year, such costs constituted 15.7 percent of sales. This year, they were only 15.4 percent of sales, or $4.46 billion.

The strong figures have allowed Kroger to adjust its outlook for the rest of the year. The company forecasts shares to rise to $2.33 to $2.40 per share, compared to to the previous $2.28 to $2.38 per share, the news source writes.

Customer service credited for Kroger's strong showing

Experts are singling out Kroger's more intense focus on customer loyalty programs as one of the keys to its first-quarter success. As part of its consumer initiatives, Kroger utilized target discounts and mailing based on consumer purchase histories.

According to the retailer, the strategy spurred growth in its number of "loyal households," who bought fewer items per visit but made more trips and, overall, bought more than the same time a year ago, the AP reports.

Kroger called its strategy "Customer 1st," which was also developed to make the retailer more competitive with restaurants and other grocery stores. The key segments the strategy focuses on are products, shopping experience, people and price, The Cincinnati Business Journal explains.

"We've pushed hard to save money in places not important to customers and to reinvest it in places that are important to them," David Dillon told investors and analysts in a conference call, the news source explains. "This is the essence of the Kroger difference, solving needs for our customers, sometimes in massive ways and sometimes in a very targeted, personal way. Customers tell us they notice the difference."

However, Kroger will need to continue to focus on customers and provide new innovative benefits to continue to see growth.