On Thursday, the Kroger Co., the seventh largest American company, headquartered in Cincinnati, had forecasted an annual profit well below Wall St. estimation, as the US supermarket chain had been spending billions on refurbishing its stores and modernizing the delivery system to compete better with larger rivals such as Walmart and Amazon.
Apart from slashing its annual profit forecast, the American retailing company had also reported a 10 percent fall in the revenue over the last quarter of 2018 and lower-than-anticipated earnings for the first time in one and a half year.
Profit forecasts were expected to be pressurized, as the retailer had been planning to heighten annual spending up to $3.2 billion, from $3 billion a year earlier, for revamping its stores and improving online businesses under “Restock Kroger” program launched more than a year ago.
In a post-earnings conference call with the analysts, the Chief Executive of Kroger, William McMullen said, “We realized business transformations are hard. But I want to emphasize we are on track to deliver on our Restock Kroger commitments”.
According to media reports, the United States’ largest supermarket chain in terms of revenue had been exploring options of self-driving vehicles for improving delivery and building robot-run warehouses, introducing shelves in hundreds of their stores that showed nutritional information and played videos, as part of an approach to compete better with the likes of Amazon, although its raising expenses had met with intense criticism and analysts were started to question whether the retailers could reach its annual profit forecast despite a trimming of its target.