The expansion of private-label products and promotions to help cash-strapped customers led to net earnings of $386 million, compared with $336.6 million last year. Total sales increased 11.5% to $23.1 million. Identical-supermarket sales increased 9.2% with fuel and 5.8% without fuel.
"Kroger's performance during the quarter demonstrates the resiliency of our 'customer first' strategy," said David B. Dillon, chairman and CEO. "Our latest customer research indicates the two biggest concerns on shoppers' minds today are high gas prices and food costs. These two factors are driving some of the behavior changes we are seeing lately, such as shoppers combining trips and actively pursuing gas discount offers."
The company has spent more than a year expanding its private label product line, and also has expanded its generic drug program to include 90-day supplies for just $10. Shoppers also can receive up to $120 in free groceries when buying Kroger gift cards, and discounts on gasoline as shopper rewards.
Kroger is on track to open, expand or relocate 70 to 80 stores, and complete between 175 and 200 store remodels during fiscal 2008.
Kroger operates 2,474 supermarkets and multi-department stores in 31 states under two dozen local banners, including Kroger, Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, QFC and City Market, as well as 778 convenience stores and 392 fine jewelry stores.
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