Kroger (KR) CEO David Dillon: We're not done growing

Grocery giant narrowing list of expansion markets

CINCINNATI - The Kroger Co. has narrowed its list of potential expansion markets to "a handful" of areas, Chief Operating Officer Rodney McMullen said at Kroger’s annual meeting Thursday.

McMullen said in an interview with WCPO Digital that Kroger wants to expand into markets where acquisitions or new store construction will be used to broaden the company’s geographic reach.

“We’re making sure it’s a market we can support from the areas where we’re already serving,” he said.

Kroger has been studying potential expansion markets for several months. Some analysts have identified Florida, New England and cities near Chicago as geographic territories with potential room for Kroger growth. But McMullen wouldn’t comment on any specific regions under study.

In his speech to about 500 shareholders at Music Hall, Kroger CEO David Dillon said the company has “identified opportunities to accelerate Kroger’s growth” by building and remodeling new stores and expanding its digital marketing efforts.

In a video Q&A, Dillon said Kroger’s continued growth will lead to more local job growth. He wouldn’t give a number, but the company has added about 5,000 local jobs since 2008, doubling its corporate headquarters to 2,000 employees since 2001.

“The growth that comes (in the future) will mostly be the result of the growth of the company,” Dillon said in the video Q&A. “But as you heard, we have lots of growth plans and with those growth plans we expect to see more people added to the Cincinnati market as a whole.”

Shareholders approved all company proposals placed before them and voted against a trio of reform proposals presented by shareholders. The reform that drew the most support called for the company to appoint an independent director as chairman, separating the chairman and CEO roles now held by Dillon. Drawing the least support was a proposal calling for Kroger to publish a report on “human rights risks” in its supply chain.

Backers of the proposal protested outside Music Hall, calling on Kroger to sign a “Fair Food” agreement to improve working conditions for tomato farm workers in Florida. Dillon told shareholders that the company’s policies already promote human rights and it doesn’t want to interfere with the labor agreements held by its suppliers.

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