Kroger management is feeling pretty good about the chain's performance. Yesterday, the company announced that same-store sales were up five percent for the first eight weeks of this quarter and that it expected to hit its forecast for 2008.
The company has benefited in part, according to Reuters, from "cash-strapped consumers" turning to its various stores for savings on store brands and discounted gasoline. Kroger is looking to finish 2008 with sales, excluding fuel, up between 4.5 and 5.5 percent.
David Dillon, chairman and chief executive officer of Kroger, expressed confidence in the company's strategic direction even in light of the current economic challenges facing it and its customers.
"In this uncertain economy, we are delivering value to shoppers on any budget through our Customer 1st approach," he said in a press release.
While availability of credit is a major concern in the market today, Mr. Dillon said Kroger has access to the funds it needs to operate the company.
"Our financial strategy provides us with sufficient liquidity to finance our short-term borrowing needs through our $2.5 billion five-year credit facility that matures in November 2011. On peak borrowing days, we expect that more than $1.2 billion of this facility would remain available. In addition, Kroger maintains uncommitted money market lines totaling $75 million," said Mr. Dillon.
Discussion Question: What are Kroger's major strengths and weaknesses? How does their credit situation compare with other major grocers?