In the wake of rising volatility and increased competition in the food retailing sector, Kroger (KR) has performed well, but has not experienced the tremendous growth that its niche rivals Whole Foods Market (WFM) and The Fresh Market (TFM) have. In large part this is because:
- Whole Foods and The Fresh Market have not solidified their position throughout America and thus are entering new markets and are producing explosive growth through substantive growth in location count.
- The sector of "specialty food-retailing" is growing at a higher rate than that of "traditional supermarkets" and thus Whole Foods and The Fresh Market are attracting a new segment of the market who are willing to make the trip to experience what the two retailers have to offer.
For Kroger though, this does not mark an inevitable weakness. In the company's most recent quarter (Q3 FY12), the company reported a 3.2% increase in identical store sales along with an increase of its EPS guidance to $2.44-$2.66 from a previous EPS estimate of $2.35-$2.42. Kroger CEO David Dillon states:
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