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Kroger Sees Faster Growth Ahead in 2020

By Demitri Kalogeropoulos - Mar 5, 2020 at 10:23AM

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The retailer's growth outlook leaves the door open for another year of modest market share losses.

Kroger (KR 1.71%) announced fourth-quarter earnings results on Thursday that indicated stable sales trends, tempered by continued market share losses against its biggest rivals.

What happened?

The supermarket chain's sales growth slowed to 2% in the holiday quarter from 2.5%. That result was roughly even with Walmart's overall growth, and it allowed Kroger to accelerate gains for the broader year. Still, its 2% increase in 2019 trailed Walmart's 2.8% gain and underperformed other peers like Target.

Management stressed the fact that Kroger met its wider financial goals for the year. "We are pleased with our 2019 results and improving trends in our supermarket business," CEO Rodney McMullen said in a press release.

A grocery cart being pushed through the aisle.

Image source: Getty Images.

What's next?

Kroger affirmed its initial 2020 outlook that calls for comps to accelerate for a second straight year while still likely remaining below its national retailing peers. Sales gains should tick up to at least 2.25%, management reiterated. Walmart is forecasting at least 2.5% growth in 2020.

Kroger's adjusted operating profit should hold roughly steady as the company continues spending aggressively on its transformation to multi-channel retailing. Yet that outlook doesn't include any potential impact from changing shopper behavior from the coronavirus outbreak, management said.

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