The retail grocery chain Kroger posted a strong sales increase of 7.3%, at US$60.6bn, for the full 2005 financial year.

Identical supermarket sales for the year increased 5.3% with fuel and 3.5% without fuel.

Fourth quarter 2005 total sales increased 7.5%, at $14.7bn, as identical supermarket sales increased 6.2% with fuel and 4.7% without fuel – the company’s tenth consecutive quarter of positive identical supermarket sales, excluding fuel.

The year-ago results included a goodwill impairment charge of $903.8m, pre-tax, that affected net earnings by $860.8m in the fourth quarter.

Kroger chairman and CEO David Dillon said “The continued focus of Kroger’s associates on delivering improved service, product selection, and value to our customers has generated another quarter of impressive identical sales growth.”

The company said it plans to grow identical sales in 2006 – funded by operating cost reductions and productivity improvements.

Cincinnati-based Kroger expects to deliver earnings per share growth in 2006 and 2007 of 6 – 8% per year, driven by strong identical sales, slightly improving operating margins, and share repurchases. In addition, shareholder value will be enhanced by the yield associated with a new cash dividend.

“We believe that Kroger’s 2006 strategic plan is a balanced approach that will allow Kroger to meet the wide-ranging needs and expectations of customers. This, in turn, will position the Company to deliver value to our shareholders in the form of a strong business model that produces solid, sustainable growth in both earnings and the dividend announced earlier today.” Dillon added.