Kroger CEO says finding talent is grocery operator's greatest challenge, as it teams up with Instacart

Kroger CEO Rodney McMullen said Tuesday that one of its biggest challenges is a shortage of staff.

The grocer currently has about 20,000 job openings, McMullen said, in an interview on CNBC’s “Squawk Box.”

“We’re aggressively hiring anywhere we can,” he said. “One of the biggest constraints we have right now is finding talented people.”

Kroger is the country’s largest supermarket operator with more than 2,700 stores under multiple banners, including its own name and other brands such as Ralphs, Harris Teeter and Fry’s. It had about 460,000 employees at the close of the last fiscal year, which ended Jan. 30. The grocer is competing for workers at a time when there are more job openings than people — and some are opting out of the workforce because of other factors, such as a lack of child care.

Other major retailers and restaurant chains have also spoken about the struggle to fill positions in a tight labor market. That has prompted companies like Amazon and Target to roll out new perks, such as covering the cost of college, and others like Walmart and CVS Health to raise hourly pay.

McMullen said the grocer has tried to stay competitive by gradually raising wages and to boost productivity by using technology and changing work processes.

On Tuesday, Kroger announced a new strategy to grow its business without the need to bulk up its own staff. It struck a deal with Instacart to deliver online grocery orders to customers’ homes in as little as 30 minutes. The deliveries will be fulfilled by gig economy workers for the third-party delivery service who will pluck groceries off of Kroger’s shelves.

“It’s leveraging both of our existing assets in a way and offering something new to the customer,” McMullen said.