Supermarket company Kroger has today reported net earnings of $294.3m for the first quarter ended 21 May 2005. Net earnings in the year-ago period were $262.8m.

Total sales for the first quarter of fiscal 2005 increased 6.2% to $17.9bn. Identical supermarket sales increased 3.8% with fuel and 2.4% without fuel.

"Kroger's associates are focused on providing our customers with high levels of service, selection and value. That was the key to our performance in the first quarter," said David B Dillon, Kroger chairman and chief executive officer. "We're targeting the areas of our business that our customers have told us are most important to them. Whether it's speeding up the checkout process, making sure our stores have the right products in stock, or rewarding our best customers with special savings, we're committed to making sure that every decision we make positively influences the way our customers feel about Kroger."

He said Kroger's emphasis on placing the "customer first" generated increased customer traffic and higher average transaction size in identical supermarkets during the first quarter. Kroger's identical supermarket sales, excluding fuel and strike-affected stores, have shown sequential improvement for eight of the past nine quarters.

Dillon said Kroger continues to rebuild its business in southern California. Identical supermarket sales without fuel at both Ralphs and Food 4 Less were positive in the first quarter and, on a combined basis, increased 1.3% over the prior-year period. Earnings before interest, taxes, depreciation and amortization (EBITDA) at Ralphs and Food 4 Less were in line with Kroger's expectations.

"We're pleased with our progress in southern California, particularly in light of the significant challenges we have faced. Our Ralphs and Food 4 Less associates are embracing the plan and are delivering against our strategy. We're seeing solid improvement," he said.

"We're off to a good start in 2005. Across the organization, our associates are working together to deliver the best possible shopping experience to our customers every day. Yet we also recognize that a lot of work remains. In this competitive environment, we must do an even better job of understanding and delivering what our customers need so that we can drive profitable sales growth and create the value that our shareholders expect from their investments," Dillon said.