Assignment 1-Financial Research Report

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Assignment 1-Financial Research Report FIN 534: Financial Management Hannah Fox Dr. Dana Leland August 30, 2015 The U.S. publicly traded company that I have selected is Kroger. Kroger is a grocery retail chain in the US. It operates supermarkets and multi-department stores under a number of banners including Kroger, Harris Teeter, Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, Jay C, QFC and City Market. According to The (Kroger Co. SWOT Analysis, 2015), the company holds the largest or the second largest market share position in 41 of the 49 major markets in which it operates. It ranks among the largest corporations in the US. Kroger's size provides it with significant pricing power over food producers,…show more content…
Michael Schlotman, Kroger CFO stated "We're happy with what we see. The consumer acceptance…is high," (Telesca, 2015). Kroger’s acquisition of Hiller’s Markets will not only bring Kroger more market share, it will provide entrée to the specialty and ethnic food products the smaller chain is known for. Hiller’s Markets has a great reputation in the market and shares similar values around things such as supporting the community. Hiller’s will allow Kroger to move into providing more ethnic foods. Kroger will be able to utilize the regional chain of suppliers for all of its product lines and learn from them how to serve that diverse customer. Kroger has announced that they are working hand in hand with Jim Hiller to ensure the acquisition is successful (Welch, 2015). (The Motley Fool, 2015) reported that while Kroger shares are soaring amid strong same-store sales, its rivals are moving in a different direction. Wal-Mart shares hit a new 52-week low earlier this week after profits fell significantly last quarter, and Whole Foods stock has sunk to a four-year low on slowing growth due to competition in organics from Kroger and others. (Dow Theory Forecasts, 2015) stated that in each of the last four quarters, Kroger boosted same-store sales at a faster rate than in the year earlier period. Kroger's expansion strategy is the least risky, as through acquisitions the company eliminates one of its competitors' stores for every store it gains. Kroger

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