Friday, March 5, 2010

Kroger

As a commenter pointed out, Kroger does indeed process cheese. I had asked several people and also checked their site:

http://www.thekrogerco.com/operations/operations_manufacturing_list.htm

At the very top there is a list of dairies. At the very bottom is "Grocery Products", which does cover cheese. however, there is no indication of the exact plants which the writer mentioned.

If you go to:

http://www.sec.gov/Archives/edgar/data/56873/000110465909070369/a09-34065_110q.htm

You will see that Kroger is complaining about profits:

We calculate First-In, First-Out (“FIFO”) Gross Margin as sales minus merchandise costs, including advertising, warehousing and transportation, but excluding the Last-In, First-Out (“LIFO”) charge. Merchandise costs exclude depreciation and rent expense. FIFO gross margin is an important measure used by management to evaluate merchandising and operational effectiveness.



Our FIFO gross margin rate decreased 79 basis points to 22.71% for the third quarter of 2009 from 23.50% for the third quarter of 2008. Retail fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin on retail fuel sales as compared to non-fuel sales. Excluding the effect of retail fuel operations, our FIFO gross margin rate decreased 88 basis points for the third quarter of 2009 compared to the third quarter of 2008 due to higher than anticipated investments in our Customer 1st strategy, heightened competitive activity and produce, meat, and dairy deflation, slightly offset by improvements in advertising and warehousing and transportation expenses, as a percent of sales.



Our FIFO gross margin rate increased 45 basis points to 23.48% for the first three quarters of 2009 from 23.03% for the first three quarters of 2008. Excluding the effect of retail fuel operations, our FIFO gross margin rate decreased 42 basis points for the first three quarters of 2009 compared to the first three quarters of 2008, due to higher than anticipated investments in our Customer 1st strategy, heightened competitive activity and deflation, partially offset by improvements in shrink, advertising, warehousing and transportation expenses, as a percent of sales.



There is no doubt that Kroger is a participant in driving down farm milk prices.

1 comment:

  1. If Kroger is a dairy processor, regardless of whether they process cheese or any other dairy products, they use producer milk and are guilty of helping to keep the milk price down to increase their profit.

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