Food & Fuel Prices Are Kicking Everybodies Butt

[Made in the USA]

Kroger fourth-quarter profit drops

CINCINNATI - Kroger Co., the nation's largest traditional grocery chain, said today that its fourth-quarter profit tumbled 16 percent, weighed down by a large inventory charge as overall sales rose a slim 2 percent.

The results still beat Wall Street estimates, but the company offered a forecast for this year that was below current forecasts.

The Cincinnati-based company -- the parent of Dillons -- said it earned $322.9 million, or 48 cents per share, for the quarter ended Feb. 2 compared with a profit of $384.8 million, or 54 cents per share, a year earlier. Kroger said revenue in the quarter rose to $17.23 billion from $16.86 billion.

Kroger said a higher-than-expected inventory charge of 5 cents per share weighed on results. The previous year's quarterly earnings also were boosted by a tax benefit, the company said.

Analysts surveyed by Thomson Financial forecast fourth-quarter earnings of 47 cents per share on sales of $16.81 billion. The earnings forecasts typically exclude one-time items.

In a weakening U.S. economy, grocers are facing rising costs for dairy, wheat and other staples, as well as soaring fuel prices that increase their costs for production, packaging and transportation.

Kroger said the key retail indicator of same-store sales, showed an increase of 8.2 percent with gas sales at its stations and 5.3 percent without fuel sales, based on the same 12-week period in both years.

"We continue to drive solid identical sales growth by improving service, value, product quality and selection for our customers," David Dillon, Kroger's chairman and chief executive, said in a statement. "During the quarter, we continued to invest in lower prices for our customers, providing meaningful savings for them in this uncertain economic environment."

Profits for the year were $1.18 billion, or $1.69 per share, up from $1.11 billion or $1.54 per share, last year.

Sales increased 6.2 percent, to $70.2 billion from $66.1 billion. Kroger said sales rose 8.2 percent when adjusted for an extra week in 2006.

Kroger forecast a profit of $1.83 to $1.90 per share for this fiscal year, below analysts' projections of $1.91. The company expects same-store sales growth of 3 percent to 5 percent, excluding fuel sales.

Kroger has 2,486 supermarkets and multi-department stores in 31 states, operating under two dozen banners that include Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, QFC and City Market.

Associated Press

[Made in the USA]

Gas prices rise to new national record

NEW YORK - The cost of filling up the family car climbed to a record high Tuesday, adding to the challenges consumers already face with falling home values and rising food prices.

Gas prices at the pump rose overnight to a record national average of $3.2272 a gallon, according to AAA and the Oil Price Information Service. That's a tad higher than the previous record of $3.2265, set last May.

Soaring gas prices worsen the financial plight of consumers already suffering through a downturn in the housing market that has sharply reduced home prices in many markets and limited Americans' ability to tap home equity for spending. Food prices are also on the rise, partly due to rising fuel costs.

"I used to think three bucks a gallon was all I'd pay, but I keep filling up," said Joe Gowans while gassing his Acura SUV in San Francisco one recent afternoon. "You have to use it."

A year ago, rising demand and a string of refinery outages had raised concerns about supplies. Now, the record price of crude oil is the culprit, propelling gas higher although supplies are at 15-year highs.

On Tuesday, light sweet crude for April delivery surged to a new trading record of $109.72 on the New York Mercantile Exchange before retreating after the Energy Department and International Energy Agency cut crude consumption forecasts for this year. Futures settled 85 cents higher at $108.75 a barrel, a new record.

Where gas and oil go from here is anybody's guess. Many analysts expect prices to moderate, while others predict oil could keep rising to $120 a barrel, or higher. And with demand for gas expected to rise as warm weather arrives, analysts say pump prices could spike as high as $3.75 a gallon, regardless of what happens with oil prices. The Energy Department on Tuesday raised its forecast of how high prices will rise this spring by a dime to $3.50 a gallon.

"I've got to say, if they ever go up to $3.50, that would be the point where I'd feel angry," said Alex Magby, a Morrisville, Pa., resident who was filling up his tank near his New Jersey restaurant job one recent afternoon. "I'd feel cheated at that point."

High prices are painful to New York cab drivers like Brandis Younge, who spends $35 to $40 on gas each day.

"Before it skyrocketed, I used to pay $25," Younge said.

Still, because gas is so expensive, analysts expect demand for fuel will rise more slowly this spring and summer than in previous years. Nationwide demand for gasoline is off by about 1 percent over the last 6 weeks, a trend analysts expect to accelerate if prices keep rising.

"We don't go visit family as much," said Steve Bagosy, of Pocono, Pa., while gassing up a company car in Manhattan Tuesday. "Just try to stay local."

The effect can be seen in states such as California, where prices are consistently 30 cents higher than the national average. Last November, the latest month for which data is available, demand for gasoline fell by 3.7 percent from the previous year in California as prices soared past $3.40 a gallon.

"It evokes a real reaction in demand destruction above $3.25 a gallon," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.

Prices have already passed the $4 mark at many stations nationwide. But Kloza thinks slower demand growth will prevent the national average from rising that high.

High gas prices may actually help some companies that rely on tourism. Carl Wilgus, executive director of the Pocono Mountains Visitors Bureau, said the number of skiers visiting the Pennsylvania ski region this winter was up, despite gas prices holding steady above $3 for most of that time. In part, that's because many people plan vacations closer to home when fuel is so expensive, he said, giving up a trip to Florida in favor of a ski vacation an hour away, he said.

"We'll definitely lose some visitation, but hopefully we'll gain some from the folks who hope to stay closer to home," Wilgus said.

The price of gassing a recreational vehicle may induce some to look for campgrounds closer to home this summer. At $3.50 a gallon, a 100-gallon Winnebago Destination RV will cost $350 to fill, $27 more than right now, and $96 more than a year ago.

Analysts believe oil's underlying supply and demand fundamentals do not support such high prices, and argue that crude's rise in recent months is mostly due to the falling dollar. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak.

The Energy Department and IEA, an energy consultant to western, industrialized nations, raised more concerns about the economic slowdown's impact on oil consumption Tuesday when both forecasters cut U.S. demand growth forecasts, but said strong demand overseas will keep prices elevated this year.

In other Nymex trading Tuesday, April heating oil futures rose 2.23 cents to settle at $2.9957 a gallon while April gasoline futures rose 1.12 cents to settle at $2.7261 a gallon.

April natural gas futures fell 2.4 cents to settle at $10 per 1,000 cubic feet on the Nymex.

In London, April Brent crude futures rose $1.09 to settle at $105.25 a barrel on the ICE Futures exchange.

[Army_of_One]

Originally Posted by Made in the USA

Kroger fourth-quarter profit drops

CINCINNATI - Kroger Co., the nation's largest traditional grocery chain, said today that its fourth-quarter profit tumbled 16 percent, weighed down by a large inventory charge as overall sales rose a slim 2 percent.

The Cincinnati-based company -- the parent of Dillons -- said it earned $322.9 million, or 48 cents per share, for the quarter ended Feb. 2 compared with a profit of $384.8 million, or 54 cents per share, a year earlier. Kroger said revenue in the quarter rose to $17.23 billion from $16.86 billion.

Profits for the year were $1.18 billion, or $1.69 per share, up from $1.11 billion or $1.54 per share, last year.

Sales increased 6.2 percent, to $70.2 billion from $66.1 billion. Kroger said sales rose 8.2 percent when adjusted for an extra week in 2006.

Kroger forecast a profit of $1.83 to $1.90 per share for this fiscal year, below analysts' projections of $1.91. The company expects same-store sales growth of 3 percent to 5 percent, excluding fuel sales.

Associated Press

OR you could spin this...."DESPITE "bad" economy Kroger still makes a profit!"

This is the media making not so good news really bad. The store STILL made a profit just not as much as projected. If I was in business and made a profit I would be pleased. It's better than NOT making a profit which a lot of businesses do.

[K C Muffin]

Originally Posted by Made in the USA

[b]High prices are painful to New York cab drivers like Brandis Younge, who spends $35 to $40 on gas each day.

Sometimes it scares me that businesses will go out of business due to fuel costs. Then I get hit with a cab bill in Dallas last weekend. The cabbie started the meter and as we stopped, I start counting out lots of money. Then he punched it another couple of times. When I asked why, he pointed to a sign that said because of the increased cost of gas, each rider (there were 3 of us) would be surcharged an extra $5. Made that 3 block ride to the local bar a little pricey! We walked back.....his gas was too expensive for us - we needed a little fresh air anyway.