Kroger says demand easing after Covid-19 stockpiling
U.S. supermarket chain Kroger Co stopped short of raising its annual forecasts on Thursday, saying a coronavirus-driven surge in demand for essential goods was fading as U.S. households reconsider what they have on their shelves.
Demand for fresh produce, meat and soups surged in March and April, and wide-ranging stockpiling in the health crisis forced the grocer to put purchase limits on cold, flu and sanitary products, as well as beef and fresh pork at certain stores.
Reporting on a bumper first quarter ended May 23, the supermarket group said that it now expected to beat earlier forecasts, which projected a rise of more than 2.25% in same-store sales, Reuters reports.
But it did not give a new forecast and said growth in second-quarter earnings would be partially offset by investment and pressure on its fuel business after the collapse in oil prices.
"Part of the challenge is it's very hard to know exactly how we expect the customer behavior to return to whatever a new normal becomes," Kroger Chairman and CEO Rodney McMullen said during an earnings call on Thursday.
"We certainly expect, as states have reopened, to see a gradual return to some lower level of food eaten at home, but we do think that's going to be more gradual than a specific stair step down."
The U.S.'s largest supermarket chain reported a massive 92% surge in digital sales in the first quarter, compared with the previous quarter’s 22% increase.
Overall same-store sales, excluding the impact of fuel prices, rose 19%. Operating profit jumped 47.6% to US$1.33bn from US$901m in the prior-year period.