Increased Grocery Prices And Theft Hurting Kroger, Despite Increase in Customer Spending

Grocery stores may be essential businesses, but even they are hurting because of the ongoing COVID-19 pandemic.

In an earnings call on Friday, Kroger, which operates the largest number of supermarkets in the United States, reported that same-store sales were down 0.6% in a three-month period, matching the heightened level of sales from last year during the pandemic. The number is in direct contrast to shoppers filling up baskets with larger items and more frequent shopping trips—something that is buffered because of other factors that are affecting the company’s profits.

Due to higher supply chain costs, increasing food prices due to inflation, and rising levels of theft, the company is facing tighter profit margins, even as year-over-year sales figures grew in produce, floral, deli and bakery departments in the stores. During the call, Chief Financial Officer Gary Millerchip also pointed out that transportation costs are higher and warehouse space is also at a premium. With all of the factors combined, it is hurting the grocer.

Overall, the company did beat estimates with second-quarter revenue of $31.68 billion but missed them when it came to GAAP earnings, which ended the quarter at $0.61 per share.

The news led to the company’s stock to stumble Friday by 9%, Yahoo Finance reports.

Kroger is the largest operator of supermarkets in the United States, operating with several different banners, including Baker’s, City Market, Fred Meyer, Fry’s Harris Teeter, King Soopers and Ralph’s, among others. Overall they operate nearly 2,800 stores in 35 states.