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Executive Heidi Petz confirmed the full-year target remains 80 to 100 new stores. She explained that locations are selected using an algorithm that identifies current and future contractor density. Petz stated there are no significant staffing issues, highlighting a record-low store turnover rate of 7-9% and a strong focus on hiring, engagement, and internal talent progression.

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SVP & CFO Allen Mistysyn suggested that significant pent-up demand could mean that even a modest drop in mortgage rates to the 6-6.5% range might be enough to spur activity. CEO Heidi Petz added that the company is proactively partnering with builders to address affordability, strengthening relationships for when the market eventually turns.

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Executive Heidi Petz declined to comment on specific customer strategies but defined 'quality sales' as focusing on premium subsegments rather than commodity spaces. The goal is to target customers who can be made more successful and profitable through premium products that save them time and labor, thereby delivering a better return for shareholders.

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EVP, Chief Merchandising Officer Seth Estep explained that the company has been actively diversifying its supply chain for three years and is on track to source less than 50% from China by year-end. He noted that for private brand apparel specifically, production has already been fully moved out of China, demonstrating the proactive nature of their strategy.

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CEO Darren Rebelez responded that they are still in the early stages of the test, assessing results and making operational tweaks. He confirmed that no final decision has been made yet regarding a broader rollout, but noted the test is comprehensive, covering approximately 225 stores in both metro and rural settings.

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CEO Darren Rebelez responded that while they are always looking at deals, they would be cautious about another large transaction before deleveraging. CFO Stephen Bramlage specified that the Fikes stores will require approximately $145 million in incremental CapEx for kitchen renovations, spread over three to four years post-closing.

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Interim CFO Todd Foley explained that capital previously allocated to building digital capabilities is now being redirected to store projects. He emphasized that physical stores and digital engagement are complementary, as the most loyal customers use both. Accelerating store openings is now a key lever for driving market share growth.

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Chairman and CEO Rodney McMullen acknowledged this as a huge opportunity where Kroger is still 'scratching the surface.' He noted that since over half of restaurant meals are consumed at home, there is a significant market to capture. He mentioned they are experimenting with different approaches, including partnerships, and believe their strong value proposition—a meal at one-third to one-fourth the cost of a restaurant—is a key advantage they have yet to fully leverage.

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CEO Rodney McMullen described non-traditional competition as a long-term factor managed through continuous adaptation and investment in areas like seamless and promotions. He expressed confidence in managing current economic pressures, noting that resulting customer behavior shifts, such as to Our Brands, can be beneficial for Kroger.

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While not providing a specific basket penetration figure, CEO Jack Sinclair noted that 70% of the company's products are differentiated. CFO Curtis Valentine added that the average basket size has stabilized around 10 items and that capital for the protein distribution transition is already incorporated into the company's existing CapEx guidance, with no major new annual commitment required.

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Executive Ron Vachris stated that Costco is committed to taking care of its employees and is focused on a fair and timely process to reach an agreement. He emphasized the company's 40-year track record of dealing fairly with the Teamsters, viewing them as valued Costco employees, and affirmed that nothing has changed in their approach to do everything they can to take care of them.

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President and CEO Tony Sarsam explained that fuel centers provide stable revenue and good margins, making the Markham deal an attractive opportunity. EVP and CFO Jason Monaco added that the co-location with existing supermarkets creates synergies for loyalty programs. Regarding private labels, Monaco stated that penetration remains strong in the high 20% range, with the 'Our Family' and 'Finest Reserve' brands performing well and helping to improve store traffic.

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CEO Sandy Douglas asserted the plan focuses on controllable actions to make the company's cost structure 'fit for purpose,' reducing sensitivity to external factors. President & CFO Matteo Tarditi stated that the marketing process for the two DCs has begun, but the company will prioritize value over speed in any transaction.

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President and CFO Sharon McCollam confirmed that 23% is a good range to use for the tax rate going forward. CEO Vivek Sankaran stated that three distribution centers are currently automated, with two or three more opening early in the year, and the company plans to continue the rollout as it is a key driver of performance and productivity.

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