Kroger, Home Depot, Dollar Tree & More: Earnings Show Retailers Investing in Growth and Innovation

The company has been investing heavily in data and analytics, particularly across pricing science to ensure competitive pricing and enhanced channel and location level markdowns. This is just one area of focus for Macy’s, which is zoning in on private brand reimagination, Market by Macy’s and Bloomie’s off-mall stores, its marketplace, the luxury arena, and personalized offers and communication. 

Additionally, Macy’s has invested in its workforce, raising its minimum wage to $15 per hour and introducing education benefits that have helped reduce overall turnover by about 3% since 2019.

“Over the past several years, we have used data and analytics to allocate assortments on a store level, including an elevated mix of brands and categories at our top locations. And across our base, we have been refreshing and remodeling our center core areas. Response from customers and partners has been positive, and we plan on accelerating this program in 2023.” — Jeff Gennette, Chief Executive Officer

Dollar Tree

Dollar Tree is looking to elevate the consumer experience by investing in inventory, expanding its product base by growing its private brands and introducing hundreds of national-brand equivalent products in 2023 via a new test kitchen in Chesapeake, VA. Additionally, Dollar Tree will be adding 16,000 cooler doors to its stores in 2023 in order to accommodate more frozen and refrigerated items.

And it will be expanding its $3 to $5-plus merchandise to another 1,800 or more stores in 2023 after introducing it to more than 1,800 Dollar Tree stores in 2022. The company plans to grow its SKU base by 1,000 items. 

“We are committed to enhancing store productivity as we focus on developing our people, tools, and technology to fuel accelerated growth. And that we do this while simplifying operations, improving the supply chain, and innovating our merchandising strategies to better support our associates and to better serve our shoppers.” — Rick Dreiling, Chief Executive Officer

Home Depot

The company’s recent investments include an improved online experience for its pro loyalty store, the launch of a new store mode feature that improves store navigation and product interaction, an elevated associate experience, and a supply chain buildout.

Home Depot has invested approximately $1 billion in compensation for frontline hourly associates, along with implementing tech that is making processes more efficient, including Order Up, which streamlines multiple order management systems into one. Home Depot also introduced an HD phone and associated apps like machine learning-powered Sidekick for enhanced communication and training capabilities to boost on-shelf availability.

“In order to provide the best customer experience in home improvement, we must focus on cultivating the best associate experience in retail. This means not only investing in competitive wages and benefits, but also providing tools, training, and development opportunities that make working at the Home Depot an enjoyable and rewarding experience.” —  Ann-Marie Campbell, Executive Vice President, U.S. Stores and International Operations

Kohl’s

Kohl’s is growing its store-in-store strategy, with plans to open 250 more Sephora shops (totaling 850 stores with a Sephora presence) and 50 smaller-format Sephora shops by the end of the year. As part of this $600 to $650 million investment, the company will also refresh several stores and open seven new stores (one is a relocation). On the digital side of the business, Kohl’s plans to expand Marketplace and its media network. 

“Kohl's Marketplace is broadening our product offering online to capture incremental sales opportunities, and Kohl's media network is leveraging our digital platform and site traffic to partner with more of our key brands and capture more advertising dollars.” — Tom Kingsbury, Chief Executive Officer

Best Buy

Best Buy is keeping an eye on several macro trends, interested in investing in cloud and augmented reality to elevate customer experiences through product innovation. 

• Learn more about immersive experiences: Top Retailers Like Walmart and Lowe's Enter the Metaverse: How to Harness the Power of Web3, VR, and AR

“The cloud solves significant customer pain points by making it much easier and faster to transfer your data and existing device preferences to the next generation of product, which creates customer interest in upgrading more frequently.” — Corie Barry, Chief Executive Officer

In order to meet digital trends, the company plans to close an average of 15 to 20 traditional large-format stores per year, moving away from a one-size-fits-all model to more targeted store formats and fulfillment solutions.

Kroger

The company has invested in a fresh strategy, implementing an end-to-end product solution across more than 1,400 stores in 2022. Kroger plans to continue investing in inventory management and supply chain solutions, focusing on tech-backed innovation. 

“Our data science teams are using predictive science to serve customers the right products at the right time and at the best value. Because we know our customers so well, we are able to provide recommendations to start their baskets and deliver personalized offers on the products most important to them, saving them time and money and making their lives easier.” — Rodney McMullen, Chief Executive Officer

As part of these efforts, Kroger is lowering fulfillment costs, building the density of demand and last-mile routing, engaging directly with third-party vendors, and growing its digital retail media business. Additionally, the company will be investing more than $770 in workforce efforts in 2023 to increase associate wages and benefits.