KR
#The promotions by category, we would use our 84.51 insights for that.
And it would really be different by customer.
Some of it would be things that you would do personalized one on one.
So, it actually ---+ if you go into the store from checking the retail price, you wouldn't see it, because it's offers that are made directly to customers.
Some is via coupons.
It's all of the above, because different customers react different ways to different promotions.
So, it's becoming increasingly personalized offers based on what that particular customer wants and desires are.
And it would be a mix of national brand, corporate brands, and fresh product, and others, so it's really a mix.
On the comp by quarter, <UNK>, I'll let you.
If you'd repeat your question.
I want to make sure I'm answering the question you asked and not what I have in my head.
Well, the comment about we expect the first quarter to look a lot like the first quarter, I guess would be a little bit of code for ID sales continue to be a little bit negative right now, which means we expect ID sales to recover as we go throughout the year, and that's going back to the questions that we've gotten on the cadence of how we expect to see the underlying EPS, is that is predicated on an improvement in ID sales throughout the year.
Sure.
Bo and his team out there in Colorado continue to do some exciting things inside their stores.
Some of the new stores they've opened, we're pretty excited about the sales levels they've been able to generate.
Bo continues to look at his book of business and his stores.
They're a very new Company.
He's learning as he goes, and he continues to make tweaks to this model and stop doing some things that aren't working and try some new things that seem to have ---+ to be bearing fruit.
We're very pleased with what we see out of Bo and his team, and continue to be enthusiastic about that kind of a format.
Thank you.
It's not something we've talked about a whole lot, and it's one of those things when you ---+ if you have 3% or 4% IDs and you have a strong capital program, and it's 30 basis points or 40 basis points or 50 basis points of headwinds from sister-store impacts, the effect of that isn't as dramatic as it is when you're close to a zero ID sales negative.
So, we haven't really talked about it.
We did in the third quarter.
What did I say.
20 basis points to 30 basis points.
Is what it typically is.
Is what it typically is.
So, it is a bit higher today, because we have been doing more stores.
A couple, three years ago, we were under $3 billion in capital, and we were above $3.5 billion in capital this year.
So, we have ramped up our capital spend.
We are touching more stores.
We're opening more new stores, which cause a sister-store impact and expanding and relocating some very strong stores, which continue to perform very well, but haven't been grand reopened long enough to be into our identical store base yet.
When you look at the number of stores we did over the last year, compared to two or three years ago, it's about double major store projects.
As those stores are open long enough, they will flip back into our ID store base, and we would hope they continue to perform the way they are and be a tailwind to ID sales.
As I said in the prepared comments, we are taking capital down from what we would originally plan to spend in 2017, because we've been guiding folks to think about 2017, and even 2018 to be a similar spend level that we did in 2016.
And most of that will come out of new store, and we'll continue a strong remodel program.
When we remodel a store, it does not come of out IDs.
It's only an expansion or a relocation or a net new that winds up affecting it.
I think it will continue for a while, but it will decline over time, as those stores become identical again.
Thanks, <UNK>.
If you look at during the quarter, it started out slow when we had the earnings call.
It actually during the holidays improved, and then January it slowed down again.
So, if you look at during the quarter, that's kind of the cadence within the quarter.
I always hate to use weather as an excuse, but we had absolutely no weather benefits this year.
The negative of that is we had no weather benefits.
The positive is, next year, if we have any weather at all, we cycle that.
If you look at the prior year, we didn't have much weather either, and in fact the only one big weather event we had was the last weekend of the year in last year's numbers.
So, our year ended against the only weather event we had in the prior year, with no weather this year.
Tonnage growth cadence remained positive, but it's because of the deflation, but obviously, around the holidays was stronger than two sides of the holiday.
They were very broad-based, and anything like ---+ anything that we would do, we would use our insights to decide what our approach is.
I wouldn't say changes since the quarter ended.
I would say that definitely are seeing some pricing in certain pockets.
I never tried to calculate on a percentage basis, but at any point in time, you will always have competitors doing things from a pricing standpoint.
It's a pretty small test.
We're early in the process.
And it would ---+ the same comment that I made earlier about ---+ on ClickList, it's a headwind but you can see as they mature, it becomes where we're neutral in terms of how a customer engages with us.
In terms of specific numbers that we would expect for this year, we're not to the point where we'd be willing to share it, other than obviously we're working hard to scale it if it makes sense, in ways that it makes sense.
We would look at all the delivery options together and really leaving it up to customer how they want to engage with us.
We'll continue to add items to Vitacost that make sense, and the Simple Truth product is obviously the initial part of that.
Thanks, <UNK>.
On the delayed tax refunds, I don't know, <UNK>, I really don't have very much insight into it.
If you look, most of our products aren't as discretionary as some of the other retailers that have talked about it.
<UNK>, I would be in <UNK>'s boat from an insight standpoint.
My conclusion, without meeting with some other folks and having conversation, would be that the timing of those doesn't affect us in a big way like it does other folks, because over my time here at Kroger, I've never heard anybody talk about I can't wait until tax refunds drop so we can get a boost in sales.
So, it just doesn't ---+ I agree with what <UNK>'s conclusion is based on most of what we sell.
The only exception would be like in Alaska, where you get paid to live in Alaska, and it's based on the size of the check, based on fuel profits or gasoline profits for the state.
Pipeline.
From the pipeline.
And that you can clearly see when the checks go out, and the size of the checks from year to year.
But those were all great big Fred Meyer stores with a lot of general merchandise.
If you look at Roundy's overall, we continue to be very happy with what Michael Marx and team are doing in Wisconsin, as well as Don Rosanova and team in Chicagoland, with the two banners.
<UNK> and team have cycled through the first set of store remodels and offerings to the customers, who are now in the second market getting remodels completed, and then we'll put a full campaign into that market, and then if we continue to see the positive reaction from the customers from ID sales dollars and units, we would expect to continue to roll that out throughout the state.
From an ID sales standpoint, it really didn't affect it very much in the quarter, certainly not as much as it did early in the year.
Thanks, <UNK>.
Good morning.
Well, I'll answer the question a little broader than just one specific competitor.
But with the comment that I made earlier, there is no doubt several competitors are improving and running better stores.
So, that is really clear when you go into their stores, and it's much broader than just Walmart.
In terms of the things we're doing, we're really doubling down on the customer experience.
We're getting even more aggressive on process change and taking costs out where it makes sense to take costs out, and improving the competitiveness of our model.
So, in terms of what are we doing about it, those would be the things that we're doing about it, because what we find is certain customers are interested in price, but all they want is a fair price.
They're really, really interested in having fresh produce, fresh meat, and a great experience, and those are things that we have competitive advantages on, and we'll continue to focus on that in our store teams and our folks, and Kroger associates across the whole Company will continue to focus on those.
Well, if you look, we would ---+ I've been around for 30 some years, and I always would tell you that we've always felt that the next five years are going to be more competitive than the last five.
I would definitely agree with that comment today.
We definitely believe the next five will be more competitive than the last five.
Because only the strong survive.
If you look at in terms of ---+ we feel very excited about the opportunities that we have to continue to grow our Business, and I put it in two buckets.
Some of it is operational driven, where if you look at the historical business that we're in, getting better at that, but if you think about the comments that you hear us increasingly talk about, looking at the opportunity in the $1.5 trillion total food business, we continue to get more and more aggressive in terms of fresh food, fresh food prepared, what's for dinner and picking things up, and that continues to grow well for us.
So, we really see that continues to be a large growth opportunity, and I would say at the moment we can see the opportunity more than the things that we're doing.
When you were out for our investor meeting, you saw some of the things we're testing, but we really continue to improve and get better and better about that part of the Business, and one of the things that we've been very pleasantly surprised is the willingness that our customers are to eat in one of our stores.
And we believe that will be an opportunity to grow the Business and create a new leg, a platform for growth.
So, it's really both of those things together.
I would say it's kind of the same.
If the right opportunity became available, we would be very interested.
But we don't ---+ we haven't changed in terms of we design a model where M&A is not required, and if the right opportunity becomes available, we would sit down and talk to somebody.
But it's not something that we're out proactively trying to change that.
Thanks.
We have time for one more question.
We continue to see very much where people are increasingly spending money in the fresh departments.
So, there is no doubt there's a shift in tonnage from the center store to the perimeter of the store, and that's been a long-term shift, and that hasn't changed.
If you look at the center store, we would still see tonnage growth there, but remember, natural and organic is part of what's driving that growth.
Natural and organic is not ---+ there's very few public companies where you can just see that by itself.
If you look at even for us, <UNK> talked about our total natural and organic business at about $16 billion.
Our Simple Truth brand by itself is $1.7 billion of that.
So, over 10%.
And those are things that you really don't see in some of the other measures.
So, the center store has been soft for a long period of time, but we've continued to gain share in the center store, and we also have continued to change the mix of what's inside the center store.
And different category reinventions with coffee and pet and baby, where we've totally redone the look and feel of those departments for our customer.
We announced earlier in the year a new relationship with IRI that we didn't talk about a whole lot, and it's really just furthering that relationship with them.
They have a few nuggets of data that Nielsen may not have that we think is going to be helpful to us overall as we look at our volume in the overall food industry, not just the grocery store industry.
Thanks, <UNK>.
Before we end today's call, I'd like to share some additional thoughts with our associates listening in today.
Thank you for continuing to connect with our customers every day.
They are rewarding us with their business.
With your help, we gained more of the market and improved our customer satisfaction scores in 2016.
Thank you for your hard work.
For those associates who are choosing to accept the voluntary retirement offer, thank you for your contributions to Kroger.
I know for some the decision to retire was not an easy one.
You should know, Kroger would not be the company it is today without your years of dedicated service.
Each of you has made a difference in the lives of our customers, our communities, and each other.
And we are very grateful for all of your contributions.
Thank you.
That completes our call today.
Thanks for joining.
