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The Kroger Co KR

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Kroger Is Best Positioned for Grocery’s Future, but Sector Valuations Are Not Attractive

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

While we do not believe the respite from price competition that the U.S. grocery sector has seen during the pandemic will last, we believe that pure-play firms can carve out durable competitive advantages. We see Kroger as better positioned than Sprouts and Albertsons, resulting in a narrow-moat rating that the other two chains do not garner.

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Company Profile

Business Description

Kroger is the leading American grocer, with 2,742 supermarkets operating under several banners throughout the country as of the end of fiscal 2020. Around 82% of stores have pharmacies, while over half also sell fuel. The company also operated more than 150 fine jewelry stores at the end of fiscal 2020. Kroger features a leading private-label offering and manufactures around 30% of its own-brand units (and 40% of its grocery own-label assortment) itself, in 35 food production plants nationwide. Kroger is a top-two grocer in most of its major markets (as of early 2021, according to company data). Virtually all of Kroger's sales come from the United States.

Contact
1014 Vine Street
Cincinnati, OH, 45202
T +1 513 762-4000
Sector Consumer Defensive
Industry Grocery Stores
Most Recent Earnings Oct 31, 2021
Fiscal Year End Jan 29, 2022
Stock Type Classic Growth
Employees 465,000

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