CINCINNATI — Kroger Co. reported Tuesday that its fourth-quarter profit rose 8 percent, as more price-conscious shoppers bypassed restaurants and loaded their carts with store brands at record rates. Its shares jumped 8 percent.
The nation's largest traditional grocery store chain said sales were especially strong for its no-frills "Value" brand and for its highest-tier "Private Selection" line that it says compares well to national brands in quality for items from coffee to pizzas. The company also said it was gaining share in most of its markets.
"Our Kroger brand portfolio has offerings that meet our customers' varied needs and budgets," David B. Dillon, chairman and CEO, told investors in a conference call.
He said Kroger is benefiting from people cutting down on restaurant meals, and stores are seeing strong sales for deli, bakery, and meats. He said more shoppers are using coupons and food stamps, while sales of non-grocery merchandise were slow.
Never miss a local story.
"We are finding the customers are basing their purchasing decisions more on what they need versus what they want," Dillon said.
Kroger said net income for the quarter rose to $349.2 million, or 53 cents per share, from $322.9 million, or 48 cents per share, the previous year.
Kroger operates 2,481 supermarkets and multi-department stores in 31 states under two dozen local banners that include Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, QFC and City Market.