The Kroger Co. (NYSE:KR)‘s stock price has risen about 30% year-to-date and the company has been performing overly good. It’s labor force will be 5% more numerous, that is 20,000 new full-time positions will be available, according to the retailer’s Chief Financial Officer, Michael Schlotman, on Bloomberg TV.
Today, The Kroger Co. (NYSE:KR) released its financial results, in which it proudly announced its 43rd consecutive identical supermarket sales growth. Total sales increased by 11.6% to $25.3 billion and net earnings grew by $30 million from $317 million second quarter last year. The company is expecting major investments of about $2.8 – $3.0 billion from sources other than mergers, acquisitions and purchase of lead facilities, also it increased its guidance for same store sales growth from 3.5% to 4.25%. All these combined give The Kroger Co. (NYSE:KR) all the necessary inputs for an impressive growth, which required the job positions previously mentioned.
“[…] We’re a vibrant growing organization, these are immediate jobs, not seasonal jobs. These are immediate needs that we have today in all geographies in which we operate […],” stated Mr. Schlotman.
Some analysts argued that The Kroger Co. (NYSE:KR) might need higher margins to satisfy investors since the operating margins are growing at a low rate. For this year it is about seven basis points or 0.07%, but the company tends to compensate through overall growth in sales, which gives a similar net effect of increasing income. The Kroger Co. (NYSE:KR) also bravely responses to competing companies, like Whole Foods Market, Inc. (NASDAQ:WFM), and rising food prices.
“We admire Whole Foods a lot, they’re a great operator. We were in their stores a lot and learned a lot from them and we both have been pretty aggressive on pricing in the national organics category and that’s a stellar department for us […],” stated Michael Schlotman.
Since differentiating is particularly difficult in the supermarket business, the company will have to conform to major pricing strategies that competitors will set, but it will also have the opportunity to lead the market.