Ahead of the Tape
Kroger Charges Less; What Price Victory?</br></br>While some investors tremble at the prospect of inflation, grocers like Kroger wouldn't mind a little more of it.</br></br>The biggest U.S. grocery-store chain is due on Tuesday morning to report earnings for its fiscal third quarter, which ended in November. Analysts, on average, estimate it earned 37 cents a share in the quarter, down slightly from 39 cents a year ago.</br></br>So far, recession-generated price competition is hurting most traditional grocery-store chains, as shellshocked consumers have fled to cheaper, big-box competitors such as Wal-Mart Stores and Costco Wholesale. On Wal-Mart's earnings call last month, Chief Executive Mike Duke said Wal-Mart plans to "widen the gap with our competitors on price leadership."</br></br>Those grocery chains that have managed to maintain or expand their market share, like Kroger, have done so at the expense of profit margins. Kroger's size has helped it cut prices more deeply than smaller peers such as Safeway and Supervalu, leading to market-share gains.