Kroger Seeks to Cut Costs With Voluntary Retirement Plan -- Update

By Annie Gasparro

Grocer Kroger Co. is offering early retirement to 2,000 corporate employees, in an effort to cut costs amid stiff competition from more stores and online merchants stocking food.

The Cincinnati-based company, with 431,000 employees across operations that include 2,800 stores, said it doesn't plan to fill the vacant roles.

Kroger is also grappling with macroeconomic headwinds like falling food costs, which hurt its sales and can weigh on profits over time. Earlier this month, Kroger lowered its expectation for its annual profit for the second time this year.

Chief Executive Rodney McMullen said that the one "silver lining" of so-called food deflation is that "it reveals to us how we can run our business better by shining a light on areas we can improve."

Kroger on Thursday declined to say how many people it expects to elect for early retirement.

As the second largest seller of food in the U.S. after Wal-Mart Stores Inc., Kroger is a key indicator of the broader economy. In its last quarter, Kroger said comparable supermarket sales -- excluding fuel sales from its gas stations -- were essentially flat, compared with a 5.4% rise a year earlier. For the current quarter, Kroger expected that key metric to be slightly positive.

Write to Annie Gasparro at annie.gasparro@wsj.com

(END) Dow Jones Newswires

December 15, 2016 18:07 ET (23:07 GMT)

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