Meat Industry INSIGHTS Newsletter

980145 Kroger Segments Improve From Logistics

January 22, 1998

Cincinnati, OH - Supermarket chain Kroger Co, which reported higher fourth quarter operating earnings, said on Thursday that its operating segments improved from logistics and technology, despite high competition and cost deflation for some products.

"Despite cost deflation in many product categories and intense competition for sales, all segments of our business continued to improve in 1997," chairman and chief executive Joseph Pichler said.

"Our retail operations benefited from coordinated purchases and improvements in logistics, distribution, and technology," he said. "Kroger's private label business also was a strong contributor throughout the year to both sales and profits."

Company spokesman Paul Bernish said deflation occurred in meats and produce, while pharmacy and over-the-counter drug prices increased. Overall, Bernish said, "Inflation was virtually zero when taken together."

Kroger reduced its costs of transporting and storing its products and kept better track of orders to limit inventory costs, Bernish said.

During 1997, Kroger opened, expanded or relocated 96 food stores, increasing overall square footage by 5.7 percent.

For 1998, the company said it plans to complete about 90 store projects, which will enable the company to grow retail square footage by approximately five percent.

Kroger has 1,383 food stores in the South and Midwest.

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