Kroger maximizes returns
The upward swing in commodity prices has certainly pushed prices up all around. As mentioned last article, oil prices have affected everything that requires delivery.
Kroger has profited heavily from the rise in commodities, as they secure foods on contract long before actual delivery. Unlike giants like WalMart that buy goods at market price hoping to flip them before the price changes, Kroger takes an added step which has added to the bottomline. As egg and sugar prices towered upward, Kroger had a locked in price much lower than the market price. Kroger could either pocket the difference, or use lower prices as a competitive advantage. Its safe to say that it did both, subsidizing prices to near sale-like values and pocketing a little extra on the side. Read more…
