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The Kroger Company

The Kroger Company. Module9. Weather. -Originally would not have thought weather had much risk with Kroger -They own Fred Meyer which has large presence on West Coast and Earthquakes pose a threat -Transporting goods across the country give concern to fuel and other transportation costs.

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The Kroger Company

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  1. The Kroger Company Module9

  2. Weather • -Originally would not have thought weather had much risk with Kroger • -They own Fred Meyer which has large presence on West Coast and Earthquakes pose a threat • -Transporting goods across the country give concern to fuel and other transportation costs

  3. Minimum Wage Considerations • -Nothing of note under legal ramifications facing the company other than a quick mention on wages • -Obama is proposing changing minimum wage and overtime pay • -This would seriously affect Kroger • -Not a measurable effect, but given industry this certainly would increase wages payable and is a concern moving forward

  4. Consider Changing Growth Rate • -Found a graph in the 10-k that compares Kroger to Peer Group and S&P • -Kroger has been outperformed by a different group then industry tables presented • -Should I change my growth rate based on this information?

  5. -Visa/Mastercard highly covered topic in news this summer and recently • -There was a big change in Kroger’s NEA from 2012-2011 • -It is shown why here because of LIFO charge

  6. -Shows that the grocery store is really the heart and sole of Kroger Brand -Fuel Sales is a concern and could be an area to hurt Kroger -I didn’t realize other sales was such a small portion of their revenue -Fuel and Supermarket sales growing similarly

  7. -Interesting to note that the biggest increase in 2012 for Interest Expense was because total debt increased -Think back to Harris Teeter Deal where Kroger financed the majority of it with debt -Expect to see a much larger interest expense in 2013 10-K being published very soon

  8. Insurance • -Similar to interest expense increasing so too could health insurance costs under Obama for Kroger • -They have calculated premiums off of historical but we are entering new period of health care • -Expect to see an increase in liabilities for Obama’s plan that came into effect in October

  9. Rise of Fresh Food? • Organic • Should this be rising?

  10. Taxes • -37% seems appropriate to keep

  11. CONCLUSION • -Nothing too alarming found in the 10-K • -If numbers look drastically off in the next 10-k however, I have a good base for why they might have changed • -Kroger is a solid company with not much going on besides grocery sales • -They have small investments so not worried about fluctuation in accounting for that

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