Kroger Says Marketing Focus Moving Beyond Price

CINCINNATI - Kroger Co. here said yesterday it will continue to invest more in initiatives such as improving the overall shopping experience and product quality rather than emphasizing low prices as heavily as it has been.

CINCINNATI - Kroger Co. here said yesterday it will continue to invest more in initiatives such as improving the overall shopping experience and product quality rather than emphasizing low prices as heavily as it has been. "When we originally started down this path, nearly 100% of what we were investing in was price, and we gradually added other elements," Rodney McMullen, vice chairman, told analysts in a conference call to review financial results for the third quarter that ended Nov. 4. According to David Dillon, chairman and chief executive officer, elements other than price "can offset the need to go much deeper on price." Net income for the quarter rose 15.8% to $214.7 million, with sales up 4.8% to $14.7 billion and comparable-store sales, excluding fuel, up 5.5%. For the year to date, net income rose 8% to $730.1 million, and sales rose 7.5% to $49.3 billion. The company said it anticipates identical supermarket sales growth in the fourth quarter will exceed 5% (compared with 5.3% in the third quarter); it also raised earnings per share guidance for this year to 8% to 10% -- compared with the 6% to 8% previously forecast, and confirmed EPS guidance for fiscal 2007 of 6% to 8%, adding it expect earnings in both years to be in the upper end of those ranges.