Kroger 2007 Annual Report Download - page 34
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Financial Impact
Sales
Fuel sales affect certain financial indicators. They have a positive effect on
the Company’s overall sales results.
$53.5 $57.7 $60.1
$3.5
$4.5
$5.7
Fuel sales also affect identical and comparable supermarket sales:
Identical Supermarket Sales FY 2005 FY 2006 FY 2007
Including Supermarket Fuel Centers 5.3% 6.4% 6.9%
Excluding Supermarket Fuel Centers 3.5% 5.6% 5.3%
Difference (basis points) 180 bp 80 bp 160 bp
Comparable Supermarket Sales FY 2005 FY 2006 FY 2007
Including Supermarket Fuel Centers 5.9% 6.7% 7.2%
Excluding Supermarket Fuel Centers 3.9% 5.7% 5.5%
Difference (basis points) 200 bp 100 bp 170 bp
FIFO Gross Margin (Note A)
Retail fuel sales lower our FIFO gross margin rate due to the very low FIFO
gross margin on retail fuel sales as compared to non-fuel sales. On a
GAAP basis, our FIFO gross margin rates were 24.80%, 24.27%, and
23.65% in 2005, 2006, and 2007, respectively. A portion of the decrease in
our FIFO gross margin rate is due to Kroger’s growing retail fuel business.
The decrease in our non-fuel FIFO gross margin rate reflects Kroger’s
continued reinvestment of operating cost savings into lower prices for our
customers.
$40.0
0
0
$70.0
FY 2005 FY 2006 FY 2007
billions
Total Food Store Fuel Sales
Total Food Store Sales Without Fuel
$60.
$50.
The Kroger Co. Page 34