Kroger, the largest supermarket chain in the US, yesterday (12 September) posted profits that were up 6% from the same period of last year, bolstered by an increase in overall grocery sales as consumers eat-out less because of higher fuel prices.
Go deeper with GlobalData
Profits for the quarter reached US$209m, up from $196.5m. Revenues rose 9% to total $15.14bn, up from $13.87bn a year ago.
Kroger said that efforts to build customer loyalty, price discounts and cost-cutting have helped increase profits.
“We are realising the benefits of our strategy, which includes listening to our customers and associates. We are investing our resources in what they tell us is most important, an approach that builds loyalty to Kroger,” said David B. Dillon, Kroger chairman and chief executive officer. “Internal measurements show customers are responding to the investments we have made in service, product selection and pricing. This focus by our associates on the business strategy enables us to achieve our financial objectives.”
Speaking at a conference call yesterday, Dillon said that increased consumer concern over increasing fuel prices, pushing spending down, was actually beneficial to the supermarket’s results. “Fuel costs are higher and people are feeling the pinch,” he suggested. “A family can be fed more economically at the supermarket,” he observed.
Same-store excluding fuel were up 6.2% for the quarter. Including fuel, same-store sales grew 8.2%. The company launched a loyalty card that rewarded customers with reduced fuel prices.
Kroger said cost-cutting measures, such as the use of energy-efficient lighting and the management of transportation to reduce petrol usage, had paid off.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataDespite the positive results, Kroger shares tumbled yesterday to close at $22.75 from an open of $23.85, as FY guidance failed to meet Wall Street expectations.
