On the money: Kroger sanguine about Wal-Mart expansion
Wal-Mart has indicated it is looking to expand its chain of Walmart Express outlets, which are 12,000 to 15,000 sq ft in size.
The retail giant has represented a threat to the country's traditional grocers in the downturn and any expansion of Wal-Mart's Express estate would mean more competition for the likes of Kroger.
On Friday (7 September), Kroger announced its half-year results, which included higher profits, and upped its forecast for annual earnings.
During a conference call after the figures were published, Jeffries analyst Brian Cullinane said Kroger had "operated for a long term very well" amid expansion by Wal-Mart in its markets.
However, he asked Kroger's management if the company would change its strategy should Wal-Mart roll out more smaller outlets.
"I think I feel like you answered the question for us by saying we've operated quite well when Walmart has been a significant factor in our markets. I see it exactly that way. And sure, there's some change in what their strategy is. But it's the same issue is making sure that we stay attentive to what our customers want in those markets and respond appropriately," chairman and CEO David Dillon said.
President and COO Rodney McMullen added: "I would add one other element maybe is that in this last quarter, in the second quarter, some of the things that you just described about Walmart planning to do, they actually have already done some of that in several of our markets. And that's reflected and contained in the overall results that we achieved in the second quarter. So think about it in that context."
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