US retail company Kroger Co reported a significant 30 percent surge in sales for March as consumers continue to stockpile essential items due to the ongoing viral pandemic. The country's second-largest retailer also revealed that it had borrowed more than $1 billion to strengthen its cash reserves in order to survive the ongoing economic and health crisis.
Kroger chief executive officer, Rodney McMullen, mentioned in a statement that the company had experienced strong sales starting in February, when cases in the US had started to increase. The rising cases resulted in a massive surge in sales across its offline and online outlets in the following month.
Confirmed cases in the US last month increased exponentially and some governments were forced to impose strict social distancing measures and lockdowns. This then led to panic buying, with people scrambling to stock up on essential items such as food and medicine. As of this writing, total confirmed cases in the US have reached more than 200,000 with global cases now nearing the 1 million mark.
McMullen revealed that sales did taper towards the end of March but were higher than normal. He speculated that people were likely adjusting to the new situation, which involved working from home and limiting travel. Kroger expects its first-quarter profits to beat its initial forecast given the sales surge in February and March.
To support its workers during these trying times, Kroger announced that it will be raising hourly wages by $2 per hour for all of its staff members until April 18. Average hourly wages for the company's workers currently stands at around $15 per hour. The wage hike will be on top of the company's previously announced one-time bonus for all frontline workers, which will be given on April 3.
As other retailers withdraw their full-year forecast amid the uncertainties facing the economy, Kroger had decided to stick with its previously announced forecast. The decision resulted in a 5 percent jump in the company's share prices this week as investor confidence in its ability to weather the storm remain high.
The Ohio-based retailer told stakeholders that it still remains conservative with its expectations given the current situation. Kroger stated that it is still too early to speculate on whether or not the economy and retail consumption would return to normal levels within the short-term. The company also didn't want to speculate on the possible impact of the pandemic on its sales in the coming quarters.
