Same-store sales remain robust for 47th quarter
Kroger (KR) has very efficiently managed the increasing competition within the supermarket industry from mass merchandisers like Walmart (WMT) and Costco (COST) on the one hand, and specialty food retailers like Whole Foods (WFM) on the other. Kroger has been able to create its own space in the supermarket industry by tweaking its store formats, introducing new products, and adding technology. Its efforts have reflected well in the consistency of its same-store sales growth. The company achieved positive identical supermarket sales growth—excluding fuel—for the 47th consecutive quarter in 2Q16.
Same-store sales versus peers
Kroger’s comps (comparable store sales) grew by 5.3% during the last reported quarter as compared to a 0.2% fall for the organic food retailer Whole Foods (WFM) and a 1.4% rise for mass merchandiser Walmart (WMT). Kroger trailed the same-store sales of Sprouts Farmers Market (SFM) that grew by 5.8% during the last reported quarter.
Kroger remains optimistic on comps for fiscal 2016
Kroger expects healthy comps to continue in fiscal 2016. In fact, during its 2Q16 earnings release, the company upgraded its identical supermarket sales growth guidance (without fuel) to the 4%–5% range for fiscal 2016 as against an earlier expected range of 3.5%–4.5%. The above guidance keeps the company around the top of the list of grocery retailers, who posted comps that ranged from a fall of 0.2% to a growth of 6% for the last reported quarter.