By Colin Kellaher and Kristin Broughton

Kroger has hired veteran PepsiCo executive David Kennerley as the supermarket operator's chief financial officer as it steers through another period of rising food prices.

Kennerley, who is currently CFO of PepsiCo Europe, will join Kroger on March 10 and take over as CFO on April 3, the Cincinnati-based company said Wednesday. Kennerley, who joined PepsiCo in 2001, held a number of senior-level finance roles there over the years. At Kroger, he succeeds Todd Foley, who has acted as interim CFO since Gary Millerchip stepped down about a year ago to become finance chief at Costco. Foley plans to retire once the transition takes place.

Kennerley joins Kroger as it charts a course as an independent company following its failed $20 billion takeover attempt of rival Albertsons. In December, a federal judge blocked the transaction, saying it would erode competition and raise prices. Albertsons subsequently sued Kroger, saying it hadn't done enough to secure regulatory approval.

Among the difficulties Kennerley will face in his new role is seemingly relentless inflation . Consumer prices rose 3% in January from a year earlier, the Labor Department announced Wednesday, a bit more than the 2.9% economists anticipated. Egg prices in particular jumped more than 15% from December, the largest increase in nearly a decade, fueled by an outbreak of bird flu. Consumers, meanwhile, are still adjusting to higher grocery store prices that began during the Covid-19 pandemic.

Kroger is focusing on adding more private-label offerings to its shelves, which come with lower prices for shoppers and higher profit margins for the company, said Mike Montani, managing director at the investment bank Evercore. "It's kind of a win-win in that respect," he said.

The category makes up just under 30% of Kroger's current grocery offering, but over time could make up as much as 40%, according to Montani. The push into lower-priced, private-label offerings also helps Kroger compete with larger rivals such as Walmart, which dominate the U.S. grocery market and have more scale to invest in digital shopping and delivery features for consumers, analysts said.

Kroger's "identical sales," which exclude the effects of store openings and closings, rose 2.3% in the quarter ended Nov. 9, compared with a year earlier. Total sales declined by about 1%, to $33.6 billion. Profit fell 4%, to $618 million.

Write to Colin Kellaher at colin.kellaher@wsj.com and Kristin Broughton at Kristin.Broughton@wsj.com

(END) Dow Jones Newswires

February 12, 2025 15:02 ET (20:02 GMT)

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