Retail

Kroger CEO: Customers will have meat during the coronavirus pandemic, so long as they are 'flexible'

Key Points
  • Kroger CEO Rodney McMullen said the supermarket chain is working with new meat suppliers and diverting meat that would have gone to restaurants to try to stay in stock.
  • He said customers may not find the meat they want, but will find something to buy if they're "flexible on eating between chicken, pork and beef."
  • Kroger is one of the grocers that's limiting customers' meat purchases, as coronavirus outbreaks in meatpacking plants cause shutdowns and reduce supply.
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Kroger CEO Rodney McMullen said customers may not find the meat that's on their shopping list, but he said grocery stores' meat departments will still have something for them.

In an interview on CNBC's "Squawk Alley," the leader of the country's largest supermarket chain said coronavirus outbreaks at meatpacking plants have led to lower store inventory.

"If you're flexible on eating between chicken, pork and beef, we constantly have one of those items or two of those — and usually three," he said. "We're working with all of our meat suppliers, figuring out how to get products that were diverted to restaurants before to get diverted to our stores. We're working with new suppliers. And it's one of those things where on a daily basis, our teams are working 24/7 finding product and getting it there for our customers."

Kroger is the parent company of numerous grocery chains, including Fred Meyer. It has nearly 2,800 food stores across 35 states and the District of Columbia. It is one of the grocers that are limiting customers' meat purchases to prevent hoarding. Customers can purchase a combined total of two ground beef, fresh pork and fresh chicken products.

Meatpacking plants have become hotbeds of the coronavirus during the pandemic. Many have temporarily shut down because of sick workers or to reconfigure the way they process meat to keep workers safe. For grocery stores, that's led to reduced supply and less variety.

McMullen said it's tried to keep prices stable, even as some of its costs rise. For example, he said, stores have continued to do promotions every week during the pandemic, "trying to help customers stretch their budget every way we can."

Along with having less meat in stores, McMullen said the pandemic has led to more online shopping and increased sales of certain items, such as baking supplies. He said yeast sales, for example, are up 600%.

He said he expects some of those new habits to last. 

"People are baking together as a family and they're enjoying it and they're connecting with their children in ways different than they had before because they were so busy," he said. "People are telling us they plan to keep doing that as things open back up."

Kroger shares, which are valued at $25.6 billion, have risen 13% since the start of this year. 

Beef ribeye steaks sit in a stack in the meat department of a supermarket in Princeton, Illinois on Thursday, April 16, 2020.
Daniel Acker | Bloomberg | Getty Images