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Kroger yesterday announced its annual and fourth quarter results, with the general consensus that its hundreds of millions of dollars in investment in various e-commerce initiatives have not yet begun to bear fruit.

Q4 total sales decreased 9.5% to $28.1 billion in the fourth quarter compared to $31.0 billion for the same period last year, for example, as fourth quarter net income of $259 million was down from $854 million a year earlier.

For the total year, sales decreased 1.2% to $121.2 billion in 2018 compared to $122.7 billion in 2017.  Adjusted net earnings totaled $1.75 billion, down from $1.78 billion a year earlier.

The good news - digital sales for the year were up 58 percent, as the company expanded pickup or delivery services to reach 91 percent of Kroger households; in addition, Kroger said that it “achieved over $1 billion in cost savings through process improvements.”

In a statement, chairman/CEO Rodney McMullen said that “Kroger solidly delivered on what we set out to do in 2018, which was an investment year that laid the groundwork for us to achieve our 2020 Restock Kroger targets including financials … As America’s grocer, Kroger has the winning combination of local presence plus a digital ecosystem enhanced by strategic partnerships enabling us to offer our customers anything, anytime, anywhere. We are transforming from grocer to growth company by deploying our assets to serve even more customers and create margin-rich alternative profit streams. We are well positioned to deliver on our Restock Kroger vision to serve America through food inspiration and uplift.”
KC's View:
Takes time and patience to rejigger an entire system for new competitive realities. In the end, if Kroger can take better care of its customers, things will be fine.