Kroger CEO aims to buy 'good stores'
6/25/2010CINCINNATI - The nation's largest grocer, Kroger Co., is interested in getting bigger - but not in buying struggling competitors, Chief Executive Officer David B. Dillon said Thursday.
The company sees "plenty of growth opportunities" and has been considering acquisitions, he said. But it is steering away from businesses that are marked down because they fell behind in the recession, he said.
"We look at lots of things, but we're not interested in becoming someone's turnaround artist," Mr. Dillon said after the annual shareholders' meeting. "We run good stores and are good at running good stores, and we don't want to buy somebody else's problem."
Mr. Dillon said Kroger is most likely to add stores in or near its current markets in 31 states. The company owns Ralphs, Dillons, QFC, and other chains, along with Kroger; only Wal-Mart Stores Inc. sells more groceries in the United States.
Being in competition with the world's largest retailer doesn't pressure Kroger to move into new markets, he said.
Kroger reported last week that profits fell 14 percent in the first quarter, while sales rose 9 percent. The CEO told shareholders Kroger has been increasing market share and its base of loyal customers and fared better than most competitors during the recession.
Shareholders at the meeting seemed patient, despite a 30 percent drop in Kroger's share price over the last two years.
"Kroger is still one of the better ones," said Edward Naberhaus of New Braunfels, Texas.
Kroger's board yesterday increased common stock buyback plans to $500 million, more than doubling the $225 million left under its earlier repurchase plan, and it declared a quarterly dividend of 9.5 cents a share.