W. Rodney McMullen
Chairman and Chief Executive Officer at Kroger
Thank you, Rob, and congratulations on your new role. I would also like to take a minute to thank Rebekah Manis for her service to the IR team. We wish her continued success in her new role as Head of New Geographies for our customer fulfillment centers. Finally, I would like to thank you all for joining us today.
Our associates have done an incredible job operating our stores, pharmacies, supply chain and manufacturing facilities through the COVID environment. Their unending commitment to serving our customers and communities continues to make a difference in Kroger's second quarter identical sales without fuel, grew 14% on a two-year stacked basis ahead of our internal expectations. We saw triple-digit growth in digital over the same time period and continue to drive cost out of the business through cost saving initiatives and operating -- operational efficiencies. We remain confident in our positioning and our ability to deliver consistently attractive total shareholder returns of 8% to 11% over time.
I'd like to spend the next few minutes discussing three key areas. First, customer behavior and how our seamless ecosystem is working. Second, I'll share examples of how we are leading with Fresh and accelerating with digital. And finally, I will highlight how we continue to live our purpose to feed the human spirit through the associate experience and our work to advance Kroger's ESG commitments.
Our strategic focus on leading with Fresh and accelerating with digital continues to build momentum across our businesses. As we've operated through the pandemic, we've recognize that the structural shifts in our customers eating and cooking habits. Customers are responding favorably to our value proposition and are enjoying the convenience of our seamless offerings. Early in the quarter, customers visited stores more frequently and many shifted from online to in-store. This highlights the relevance and convenience of our easily accessible footprint. Towards the end of the quarter as COVID-19 cases increased in many geographies, customers began shifting back to our digital solutions. This further demonstrates the strength of our seamless ecosystem.
Customers can choose how they want to shop. Our job is to be available in every channel so the customer does not have to compromise. Regardless of how they choose to shop, customers are eating more food at home because it's more affordable, convenient and healthier than other options. While some food at home trends may be transitory, our research suggests those I highlighted are structural, and Kroger is uniquely positioned to address them. Through our assortment of fresh products, world-class digital platform and innovative mill solutions, we will continue to elevate our position as a food authority so that when customers think food, they think Kroger.
We continue to advance our position as a leader in Fresh during the second quarter. We saw positive identical sales in Produce and Floral and Deli Bakery even as we lapped elevated sales in 2020. Our research shows how much our customers love our brands. Sales for both Simple Truth and Private Selection brands were strong as food and food at home trends remained sticky. We continue to innovate within Fresh. For example, our expanded partnerships with Ghost kitchens allow us to offer customers freshly prepared on demand restaurant food. This is especially relevant at a time when many customers are looking for inspiration and 70% of our customers say convenience is important when cooking.
We also announced our 2021 Go Fresh & Local Supplier Accelerator cohort, and are already bringing innovative locally and regionally sourced products to stores across the country and helping many small entrepreneurs achieve their dreams. Earlier this week, Kroger announced our new brand icon, the Fresh Cart icon, brings together the Kroger family of companies are the one unifying visual and reinforces our brand promise, Fresh for Everyone.
We are very proud of our growth in digital, which increased 114% over the last two years, similar to our first quarter growth. We remain on track to deliver against our 2023 digital growth and profitability targets introduced at our 2021 IR Day. While digital sales decreased 13% during the quarter, almost all customers who reduced their online spend during the quarter continued to shop with us in-store, highlighting the power of our ecosystem and our ability to create a meaningful customer experience across all channels. As a short reminder, Kroger has doubled our e-commerce household penetration, increasing the number of our brick and mortar customers that engage with our digital solutions since 2018.
During the quarter, we added over 340,000 new customers to our digital platforms. We continue to expand capacity across our footprint and we reduced wait times for Kroger pickup. As we look ahead, our seamless ecosystem will remain a competitive advantage as we offer what customers need and want in a way that fits into their life, whether it's shopping in our stores, picking it up at our stores or getting it delivered or shipped directly to their homes.
W continue to enhance our seamless ecosystem. As we shared last quarter, we currently have two customer fulfillment centers open, which are expanding our capabilities in Ohio and allowing us to expand it to the new geographies within Florida. We are happy with the performance thus far and are energized by the volume and growth in both Shed.
In Ohio, our focus has been on involving the customer proposition to maximize opportunities alongside our existing digital solutions. In Florida, we launched delivery savings path, offering customers unlimited deliveries for just $79 per year. We continue to see incredible net promoter scores and our customers tell us they love our friendly, professionally trained drivers, and the refrigerated delivery vans that bring the freshest food directly to their doorsteps. Looking ahead, we remain on track to open six customer fulfillment centers over 2022 and 2023, which will further expand our seamless ecosystem.
Before I share some specifics on how we are using data and personalization to grow the business, I thought it would be helpful to remind you about how our rewards program and how it works. Our rewards programs has been active for over two decades. It captures data from 60 million households at 96% of our sales. Customers clearly see the value of our program, which drive sales and builds loyalty. As an example, nearly 60% of all items in a digital basket were added through our personalization science, highlighting our ability to make meaningful suggestions that surprise and delight customers. Furthermore, when we personalized recommendations for our customers, we can reduce their time to shop by nearly 70%. Overall, one in three people have noted their groceries have gotten more expensive in the past month. Kroger customers benefit from our personalization as we offer a highly relevant savings at a household level, allowing them to further stretch their food dollars.
Our associates continue to deliver a full fresh and friendly customer experience every day, every time, while also supporting our communities through the pandemic. We remain urgently focused on keeping people safe in our stores and facilities. Our teams were recently recognized with the Gold Award for excellence in Human Capital Management from the Brandon Hall Group for our people-centered COVID-19 response. Obviously, we're especially proud of that recognition.
During the quarter, we introduced new technology to elevate our associate experience. Kroger launched Fresh Start, a new personalized training program to foster greater associate engagement and retention. We also launched our Feed app, which provides associates easy access to company communication and resources from their smartphones. We are incredibly proud that during the quarter we saw an improvement in retention as we strive to be an employer where associates can come for a job and stay for a career.
Now, turning now to the live our purpose. We continue to believe that customers, associates and investors are increasingly choosing where to shop, where to work and where to invest in companies that are taking meaningful steps to improve our communities and work to build a more sustainable planet. We recently published our 2021 ESG report on the Kroger Co.com. It outlines our progress over the last several years. It further outlines our aspiration to further integrate ESG performance and to lines of business and our commitment to creating shared value that benefits all stakeholders.
We imagine a world where everyone is thriving together and Kroger is helping millions of people live healthier, more sustainable lifestyle, protecting and restoring natural resources, and contributing to more responsible and inclusive global systems. One of the many ways we bring our ESG vision to life is through our work that our Kroger Health team has been doing to serve and support our customers and communities through the pandemic.
During the quarter, we worked with Lyft so provide rides to COVID-19 vaccine appointments, teamed up with local sports icon to drive awareness and access in the underserved communities, and we concluded our CommunityImmunity Giveaway. To date, we have provided over 6.7 million doses of the vaccine and continue to drive availability and education. And yesterday, President Biden noted that Kroger is one of three national partners who have agreed to make the rapid COVID tests available to customers at cost for the next 100 days. Kroger is committed to helping people live healthier lives, while safeguarding the communities we serve. Our ESG goals are ambitious and with the team of almost 500,000 dedicated and driven associates, they are also achievable. Since we first introduced our commitment to delivering strong and sustainable total shareholder returns in 2019, our teams have been laser-focused on execution. This focus has resulted in tangible results, allowing us to deliver this quarter and for the long term.
Now I would like to turn it over to Gary to discuss our second quarter financial results. Gary?
