The Kroger Co. (KR) Earnings: An Early Look – Safeway Inc. (SWY), Target Corporation (TGT)

But Kroger managed to withstand the tough environment for grocery stores last year by adopting the gas station approach that its warehouse competitors have used to perfection. With fuel at more than 1,000 The Kroger Co. (NYSE:KR) grocery stores, the company attracts customers who then shop for groceries, boosting overall sales. Its private-label business has also helped Kroger keep margins higher, and an increase in healthier organic and natural products represents The Kroger Co. (NYSE:KR)’s answer to Whole Foods Market, Inc. (NASDAQ: WFM), which has used those offerings to keep its margins at much-higher levels than traditional grocer usually see.

So far in 2013, though, grocery chains’s shares have done better. Safeway Inc. (NYSE:SWY) reported earnings that were far higher than analysts had expected, although a big share repurchase program was largely responsible for the gains. Dividend-hungry investors have also liked Safeway’s and Kroger’s yields, both of which are above 2%.

In Kroger’s quarterly report, it’ll be interesting to see whether the grocer can buck the trend of weak comps in light of the new payroll tax hike that took effect Jan. 1. With strong management at the helm, Kroger is better positioned to handle the challenges of the industry than many of its rivals.

The article Kroger Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends and owns shares of Whole Foods Market (NASDAQ:WFM). It also owns shares of SUPERVALU.

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