KR Kroger Co

By Heather Haddon 

Kroger Co. is hiring 11,000 workers to improve customer service and efficiency at its thousands of stores as competition among food retailers heats up.

Kroger said the new positions at its nearly 2,800 supermarkets will include 2,000 managers and represent a 2% increase to its workforce of about 450,000 full- and part-time employees. The hiring push is part of a three-year plan to focus on overhauling existing stores instead of building as many new ones as in past years.

The largest U.S. supermarket chain wants to put more workers in stores instead of its Cincinnati headquarters, a spokeswoman said. Last year Kroger gave voluntary buyouts to 1,300 white-collar workers to cut costs as sales slumped. Kroger has also fined suppliers to collect revenue and improve performance, as has Walmart Inc.

Kroger is facing tougher competition for shoppers. Amazon.com Inc.'s purchase of Whole Foods Market is prompting grocers to speed up digital investments. At the same time they are feeling pressure to keep prices low as European deep-discounters Aldi and Lidl expand in the U.S.

"The core issue in food retail remains the high degree of bottom-line uncertainty," analysts at Morgan Stanley wrote to investors recently.

Kroger's stock was up slightly Tuesday, but remains down around 14% this year.

Food retailers are also competing for workers in the tightest U.S. labor market in nearly two decades. The unemployment rate held at 4.1% on Friday for the sixth straight month, a 17-year low. Job openings are at a record high.

The worker shortage is even more pronounced in the Midwest, where a net 1.3 million people who were living in the region in 2010 had left by the middle of last year, according to the Census Bureau. Slow population growth, the aging baby boomer generation and fewer immigrants than the rest of the country has held back labor-force growth there. Midwestern states including Ohio, Indiana and Michigan are toward the top of those with the most Kroger stores.

Kroger, Walmart, Target Corp. and other food retailers are also investing savings from the federal tax law to boost worker pay and benefits. Kroger has said it would spend $500 million on worker pay and benefits, including raising starting wages in some regions to $10 an hour.

--Shayndi Raice contributed to this article.

Write to Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

April 10, 2018 14:14 ET (18:14 GMT)

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