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Kroger Company Financial Analysis

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Kroger Company SEC 10-K Analysis The Kroger Company was founded in 1883 and incorporated in 1902 and is now headquartered in Cincinnati, Ohio. As of January 30, 2016, Kroger is one of the largest retailers in the world based on annual retail sales; they also manufacture some of their own food for sale in company supermarkets. Their primary revenues are earned at point of sale to customers in Kroger stores and fuel centers. As of January 30, 2016, Kroger operated, either directly or through its satellite companies, 2,778 retail food stores under a variety of local companies, 1,387 of which had fuel centers. Kroger Co. also operated, through its subsidiaries, 784 convenience stores, 323 fine jewelry stores and an online retailer. Their fiscal …show more content…

Kroger estimates that approximately 95% of their inventories in 2015 were valued using the LIFO method. Cost for the remainder of their inventories, including almost all fuel inventories, was determined using the First in First Out (FIFO) method. Kroger utilizes the Item Cost Method to determine its inventory cost before the LIFO adjustment for their store inventories. The reason Kroger employs the item-cost method of accounting is that it allows Kroger a more accurate reporting strategy for periodic inventory balances. Another reason Kroger uses this method is most of their inventory is finished goods and can recorded items at actual purchase costs. Kroger conducts a physical count to evaluate inventory shortages throughout the year from their facilities. They record allowances for inventory shortages based on the results of the recent physical inventories to provide for estimated shortages from the last physical count to the financial statement date. …show more content…

Kroger supermarkets stock their own brands such as Private Selection?, Kroger?, Ralphs?, Fred Meyer?, King Soopers?, Simple Truth? and Simple Truth Organic? in their facilities. Kroger also operates under local banners of companies that they own such as Baker?s Supermarkets, City Market, Dillions Food Stores, Fry?s Food and Drug, Gerbes Super markets, Jay C, Vitacost.com, Harris Teeter, Roundy?s, Owen?s, Ralphs, Scotts, etc. This affords Kroger Company goodwill in these local markets. Per their SEC 10-K report Kroger estimates that as of January 2016 their goodwill totaled at $2.7

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He also stated that Kroger employed twenty five thousand more employees in 2014. In that same conference call, Mike Ellis, Kroger’s President and Chief Operating Officer presented the 2014 Kroger Fiscal Report. In 2014, Kroger total sales were $108.5 billion, up 10.3% from 2013. Kroger’s earnings for 2014, with adjustment items, were $1.73 billion, or $3.44 per diluted share.

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PR Newswire New York (New York) 20 July 2016. Recent as of January 2017, other services Kroger Company provides to its customers are providing 1,455 fuel centers within a few of the grocery stores locations, 784 conveniences stores operated under the chain, 319 jewelry stores, and an online retailer. (Merchant Online by FTSE

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In the review of the corporate level strategy, we can see many different competitive advantages branching from their use of corporate diversification and vertical integration. Going deeper into those strategies the three elements that allow for a competitive advantage for The Kroger Co. include operating into different markets, having a successful customer reward program, and by having many different locations nationwide under many different brand names. The VRIO analysis found that all three of these give Kroger’s a sustainable competitive advantage by being valuable, rare, costly to imitate and having the right organization structure business wide. In the review of the business level strategy, there were just as many different competitive

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These people who shop here tend to earn about 80 – 100k a year and have an advance degree. The reason why Kroger has an older customer base is because they have always marketed loyalty. Kroger is one of the oldest grocery store chains and specifically rewards their customers for being there with them. To reward their loyalty, Kroger has been known to send out “two sheets of twelve coupons specifically designed for each household. They are tailor-fit to each of the store’s customers based on their purchases.

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