Kroger’s new digital strategy

Last fall, Kroger announced a new strategy called “Restock Kroger” that it said would generate $400 million in profit and $4 billion in free cash flow by 2020. The strategy is a combination of cost cuts and some shifts in how it will spend $9 billion over the next three years.

Following this trategy, Kroger is adding the “Scan, Bag, Go” system to 400 stores nationwide and “will have them installed from March through August”, said April Martin Nickels, a Kroger spokeswoman. Shoppers have to have a Kroger Plus card to use it, she said, and the purchase is completed at the self-checkout. 

“We’re upping our digital capabilities,” she said. Kroger already uses algorithms to send customers relevant coupons and is planning to apply algorithms for digital pricing on store shelves that will allow it to change prices quickly. There’s no roll out schedule for that system yet, Martin-Nickels said. 

Digital pricing can be used to lower prices on items that are overstocked, but it also could temporarily raise the price on that last jar on a shelf of a particular brand of mayonnaise.