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Kroger stays competitive

TEXT OF STORY

BOB MOON: One of the country's biggest supermarket chains, Kroger, comes out with quarterly earnings today. Analysts expect the big grocery retailer to post $15 billion in revenue and a 12% increase in earnings per share. It's been able to do that, even though the supermarket industry has become hotly competitive in the last few years. Diantha Parker looks at how Kroger has been able to keep up.


DIANTHA PARKER: Kroger operates more than 2,500 supermarkets across the country and many of those are so-called multi-department stores that sell everything from milk to televisions to jewelry.

That means Kroger competes directly with Wal-Mart, which is now the country's largest grocer along with its biggest retailer.

Morningstar analyst Mitchell Corwin says Kroger has countered by developing house brands in three different price ranges to lure discount shoppers

MITCHELL CORWIN: That person can say 'well, the Kroger is convenient, it's easy to get in and out of, and I'm not paying that much more for a product.'

Corwin says Kroger also has full-service gas stations attached to 600 stores, more than any other chain.

And it's good at using technology to target its best customers. If you spend $100 there in a week, he says, expect to get special coupons in the mail to bring you back.

I'm Diantha Parker for Marketplace.

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