The country's largest traditional supermarket operator on Thursday raised its profit outlook for the year after reporting a higher quarterly net income that beat Wall Street expectations, although overall sales were shy of forecasts.
The Cincinnati-based company, which also owns Ralphs, Fry's and Food 4 Less, said sales at stores open at least a year rose 3.3 percent during the period, excluding fuel. The figure is a key metric because it strips out the impact of newly opened and closed locations.
The growth comes as Kroger and other traditional supermarket companies are working to adapt to a shifting industry. Shoppers are increasingly getting their groceries at big-box retailers like Target, drugstores and even dollar stores that have expanded their food sections.The competition has taken its toll on some supermarket operators; SuperValu earlier this year sold off five of its major chains after struggling for years to fix its business.
But Kroger has been trying to keep pace in a variety of ways.
To improve the shopping experience, the company worked on shortening wait times at its checkouts, expanded its store-brand lineup and invested in making its loyalty program more sophisticated. It's also experimenting with different store formats that are more akin to big-box retailers and dollar stores.
In a conference call with analysts, Chief Operating Officer Rodney McMullen said shoppers made more trips to stores and bought more per visit during the quarter.
He also noted that Kroger's store brands now account for 26 percent of total units sold and 24 percent of total sales, excluding pharmacy and fuel.
