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Kroger a ‘compelling investment’

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CINCINNATI — In his annual letter to Kroger Co. stockholders, chairman and chief executive officer Rodney McMullen characterized 2015 as a “triple crown” year, a baseball reference to the relatively rare instance in which a player leads his league in three offensive categories: batting average, home runs and runs ­batted in.

In Kroger’s case, the three leading metrics are same-store sales growth, employee opportunity and shareholder return, McMullen explained in his May 12 letter. “We achieved our 12th consecutive year of positive identical-supermarket sales growth; improved overall engagement with and created more opportunity for associates; and delivered financial results in line with our long-term growth objectives and a total shareholder return of 13.63%.”

McMullen, who described himself as a lifelong baseball fan, noted that Kroger’s financial performance, unlike baseball’s triple crown, “wasn’t a rarity.”

He continued, “Kroger is a compelling investment because of our ability to deliver remarkably consistent results. That consistency can at times make it easy for our results to be taken for granted. But I can assure you this: we don’t take Kroger’s success for granted, not for a second. To repeat what I said above, what makes our team of associates so special is that we are never satisfied with what we’ve already accomplished. Kroger may be 133 years old but we are just getting started.”

McMullen’s letter also details what management intends to do to keep the hits coming.

“We look at growth initiatives in three categories: our core business, beyond the core and innovation,” he declared. “Balance among these three areas is crucial to our strategy. Too many companies over-focus on innovation in the hopes of discovering the next big thing. Balance — the integration of these strategic elements across our business — is how we’ll continue to win with customers and create sustainable long-term value for shareholders.”

As it executes on its business plan, Kroger continues to experiment with new technologies, products and store formats, McMullen noted.

“We believe that customers and associates increasingly make decisions based on how well companies take care of their people, their communities and the planet,” he added. “This is especially true of Millennials, who make up more than half of Kroger’s workforce today.”


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