What happened

Kroger (NYSE:KR) trailed the market last month by shedding 12% compared to a 3% decrease in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts.

That slump added to a difficult run for the retailer's shareholders, who have seen the stock give up over 30% in the past three years even as the broader market gained 28%.

So what

The March decline came following quarterly results that paired improved sales trends with reduced profitability. On the bright side, the supermarket chain wrapped up its 13th consecutive year of market share growth as comparable-store sales gains sped up to their fastest pace in more than a year. Detracting from that result was the fact that operating margin fell, and earnings dropped for the second straight year.

A customer pushes her cart through the grocery store aisle.

Image source: Getty Images.

Now what

Rising sales volumes indicate that Kroger's business isn't in retreat, and the retailer has a few promising growth avenues available, such as its popular private label brands like Simple Truth. Management is hoping to push deeper into the quickly growing prepared food delivery market, too.

But investors will have to be patient as they wait for these initiatives to take hold. At the same time, they'll have to accept the reduced profits that are driven by the combination of heavy growth investment spending and a retailing industry that's forcing its biggest players to cut prices to protect market share.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.