Financial Analysis for Kroger Co Research Paper

Financial Analysis for Kroger Co - Research Paper practiceFor an industry like Krogers, the most important factor for consumers is price. The products available in supermarkets are not severalise and therefore they cannot be advertised heavily. Much of the advertisement that is done is carried out on the basis of attracting families to unwrap at Kroger because it is cost effective to do so. Apart from being cost effective Kroger also has products of mellowed quality which makes it popular among American consumers. Kroger Co. has 42 manufacturing plants and including dairies, beverages and meat plants and all of these plants are of the highest standards. In the novel eld there has been a tremendous increase in the fuel prices and the recent financial meltdown has make things worse for many industries including Kroger. The rise in fuel prices caused an increase in costs of the products sold by Kroger. Kroger is both a manufacturing company and a retail outlet and was therefore he avily affected by the increase in cost of fuel and other raw materials. According to Porter, there are 3 strategies a company can adopt to become competitive and Kroger has undertaken the cost leadership schema which helps to stigmatise it from the rest of the supermarket chains. The continuing increase in fuel prices will prevent Kroger from increasing costs and the strategy and it would be difficult to achieve goals. Kroger can shift to alternative sources of energy and reduce its costs that way. The recent financial meltdown meant that the demand for grocery products decreased to a large extent. In the past consumers would demoralize gourmet foods and other items from supermarkets but due to the credit crises that has decreased. Consumers have become more price informed and buy only items that are necessary. Such a decrease in spending has affected the spotless industry at large and profit margins have gone down since the past. In 2009 there was a 60.5% drop in consumer conf idence index. (Zahorsky) Kroger has been taking advantage of the opportunities and developed its own blade called Private cream and manufactures its own products under this brand name. Consumers often prefer branded products in place of national and Kroger has been in(predicate) in understanding this need. In 2009 Kroger earned more or less $1 billion in sales from this brand alone and the sales continue to grow today (Zahorsky). Such a step by Kroger would not only help the company but the industry as a whole. Liquidity Ratio ongoing ratio of Kroger Co. for the financial year 2012 = = 0.804 Current ratio for the year 2012= 0.8041. The current ratio for the industry is around 0.8 which is the same as Kroger (Kroger Co. Ratios, 2012). The