Kroger winning in US grocery wars

The biggest grocery chain in the US claimed success in the nation’s grocery wars yesterday, as Kroger reported sales as being up sharply while second-placed Albertson’s experienced a profits slump.

For the quarter ended January 28, Kroger made a profit of $282.1 million (£162.3 million) compared with a loss a year earlier of $652.1 million (£375.3 million), when it was hit by charges for writing down the value of its Ralphs and Food 4 Less operations.

Sales rose to $14.7 billion (£8.5 billion) for the quarter from $13.7 billion (£7.9 billion) a year ago. For its full year, Kroger reported profits of $958 million (£551.5 million) on turnover of $60.6 billion (£34.9 billion). For 2004, Kroger reported a net loss of $104.2 million (£60 million) on sales of $56.4 billion (£32.5 billion).

Kroger has achieved ten consecutive quarters of like-for-like store sales growth. By contrast, rival Albertson’s - the second-largest supermarket chain in the US - said yesterday that its profits in the fourth quarter to February 2 plunged 17 per cent. Profits fell to $162 million (£93.2 million) from $194 million (£111.7 million) a year earlier. Quarterly sales fell 9 per cent to $10.23 billion (£5.88 billion).

Albertson’s chief financial officer Felicia Thornton blamed the numbers on Hurricane Katrina, changes to company accounting procedures and costs incurred in soliciting bids for the chain, which concluded with a $17.4 billion (£10 billion) deal led by Supervalu and CVS.

The purchase is expected to be completed by the middle of the year.