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Kroger Fills its Basket

Despite flat sales, grocer exceeded plans and feels well-positioned for expansion



The Kroger Co. (Cincinnati), the nation's largest supermarket retailer, reported a 3.5 percent total sales increase for its first fiscal quarter, ended May 24, 2003.

Identical food-store sales, including fuel, declined 0.1 percent. Identical food-store sales, excluding fuel, decreased 1.1 percent. Comparable food-store sales, which include relocations and expansions, increased 0.7 percent for the quarter. Comparable food-store sales, excluding fuel, declined 0.5 percent.

Nonetheless, Kroger management expressed satisfaction with the results. “We are pleased with our sales and earnings performance in the first quarter, especially in the light of continued economic uncertainty, high unemployment, and intense competition,” said chairman and ceo Joseph Pichler,. “Kroger's Strategic Growth Plan, announced 19 months ago, is the appropriate response to this economic and competitive environment. We believe that the continued enhancement of the Plan will improve our competitive price position in selected categories and markets. We expect to exceed the Plan's original goal of $500 million in cost savings by the end of 2003. Through the end of the first quarter, Kroger had achieved savings of $377 million.”

During the quarter, Kroger opened, expanded, relocated or acquired 23 food stores. Total food store square footage increased 4.1 percent over the prior year. And the company said it expects identical food-store sales, including fuel, to be positive for the full year.

“Kroger produced strong results in the first quarter,” said Pichler. “We were able to reduce debt, repurchase stock and maintain a solid capital investment program while generating sales and earnings results ahead of our traditional competitors. We are pleased with the implementation of our strategy. Kroger has the financial resources to continue making the price investments necessary to build our business, remodel and expand our store base, protect our market share, and repurchase stock. ”

Kroger operates 2496 supermarkets and multi-department stores in 32 states under two dozen banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's and Fry's Marketplace, Dillons, QFC and City Market. The company also operates (either directly or through its subsidiaries) 792 convenience stores, 445 fine jewelry stores, 395 supermarket fuel centers and 41 food processing plants.




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