Kroger Co. has stated that despite the crisis of increasing gas prices, an encouraging trend has been observed. This was said after the company announced that their 4th Quarter Sales have strengthened.
Despite this positive news however, the Company remains cautious. As shoppers are continuously facing the problem of increasing unemployment, as well as rising food and gas prices, there is no telling what will happen to the Company’s sales in the coming months.
A conference call was held recently between the management of Kroger’s and the Company’s investors. During the conference call, Kroger’s leaders were asked about their opinion on the impact of inflation on consumer spending.
Kroger’s Chairman and CEO, David B. Dillon, said that it would be difficult to read the economic trends in advance. According to him, this is because when retail prices go up, there are some products (like milk) that are significantly affected and some products which do not experience a considerable change at all.
What the Company was pleased about though, was the fact that they have begun to observe a comeback of grocery revenue, unlike the decrease in sales that they had previously been experiencing Solid tonnage growth was still observed in the last quarter. Dillon also added that the other Kroger stores were getting strong 4th quarter sales as well. This was definitely a positive sign for the Company.
Dillon said that he is optimistic with the way things are going for Kroger. However, he added that although they are optimistic, caution should still be practiced as the current economy is still fragile and a lot of their customers are still hugely distressed by it.
News Source: Business Week