Grocery retailer Kroger has reported net earnings of US$185.4 m for the third quarter ended 5 November 2005. Net earnings in the year-ago period were US$142.7m.

Total sales for the third quarter increased to US$14.021bn from US$12.854bn a year ago. Identical supermarket sales increased 6.6% with fuel and 3.7% without fuel. This represents Kroger's ninth consecutive quarter of positive identical supermarket sales, excluding fuel.

"Kroger's performance in the third quarter is a clear sign that our associates' focus on providing improved service, selection and value is being well-received by our customers," said David B. Dillon, Kroger chairman and chief executive officer. "Thanks to this emphasis on placing the 'customer first,' Kroger posted its highest identical supermarket sales since the merger with Fred Meyer in 1999."

"Our financial performance in the third quarter reflects the consistent approach we have taken to managing our business. We continue to balance investments in gross margin and improved customer service with operating cost reductions to provide a better shopping experience for our customers," Dillon said.

Sales and operating profit at Ralphs and Food 4 Less in southern California improved during the third quarter as compared to last year. In southern California, identical supermarket sales without fuel at both divisions, on a combined basis, increased 2.9% over the prior-year period.

"The pace of our recovery in southern California is slower than we would like. Clearly there are opportunities for growth, and our teams are focused on seizing those," Mr. Dillon said.

Over the first three quarters sales increased 7.2% to US$45.8bn. Net earnings for the first three quarters were US$676.0m. For the first three quarters of fiscal 2004, net earnings were US$548.0m.

"Thanks to the hard work and outstanding contributions of the entire organization, Kroger has made tremendous progress in several key areas this year. Our associates are offering improved shopping experiences for our customers in a variety of ways, and Kroger has been able to fund these by improving productivity and taking costs out of our business . Holiday sales are off to a strong start . We are focused on becoming more competitive in every aspect of our business so that we can take advantage of growth opportunities and generate value for our shareholders," Dillon said.