Boston, MA 05/22/2014 (wallstreetpr) – The $24 billion retailer and manufacturer of mostly food items Kroger Co. (NYSE:KR) is known for putting its money where profits can be extracted. That thesis helps the company to grow organically and through acquisitions as it builds value for both customers and shareholders. The company is in the good books of many people – customers, shareholders and analysts because of its business acumen.
In London this week, J. Michael Schlotman, Chief Financial Officer of Kroger Co. (NYSE:KR), presented what most investors wanted to hear at the J.P. Morgan Consumer and Retail Conference. The conference brought together players in the consumer and retail space and attended by investors and potential investors.
While Mr. Schlotman issued highlight on a wide range of issues touching on his company, he devoted significant amount of time and energy to talk about Kroger Co. (NYSE:KR)’s plans for the future in relation to the recently acquired Harris Teeter.
Price reduction to support profits
First and foremost, Kroger Co. (NYSE:KR) acquired Harris Teeter in January for $2.5 billion, marking it one of the many acquisitions that the company has made in recent times as it seeks growth. Although the CFO revealed that Harris Teeter’s customer-base is not one that looks at prices as the first consideration, there is a need to make price adjustments in the stores given that competition is taking the better part of the Charlotte’s grocery market.
The executive told investors that prices were quite high when the company took over the control of Harris Teeter and it has been making price reductions to entice more customers to the store. While prices may still seem high, Kroger Co. (NYSE:KR) intends to make more reductions from time to time as it cuts costs to support such reductions.
In order to make the price reductions known to customers, the store has been running frequent radio and television adverts to that effect.
Cost-saving target
Kroger Co. (NYSE:KR) expects its acquisition of Harris Teeter to result into cost-savings of up to $50 million within the next four years thanks to enhanced scale and efficiencies.
