Note: Kroger's 2Q17 10-Q was posted on Friday. While the below article is event-driven not data-driven, I always encourage potential and current investors to spend some time reviewing a company's underlying financials. You'll be surprised what you learn.
Kroger (NYSE:KR) has been taking a beating in the markets due to a perception that life after Amazon (AMZN) will result in a much reduced (if even existing) grocer. Kroger bulls and bears have been pretty passionate on the topic (see the comment section of any recent article), with the primary ground for debate centering around how Amazon (and Aldi, Lidl, etc.) will simply undercut Kroger to the point of no return.
While I'm doubtful economic pressures will allow margins of basic brand name grocery products to get much lower than they presently are, let's say for a moment that this occurs. What can Kroger do? A better question - and one I will address in this article - is what Kroger currently is doing (Note the important distinction of "basic brand name grocery products").
There are many opportunities for Kroger to grow even facing these headwinds. In fact, some of these opportunities are right out of Whole Foods' (WFM) playbook.
Just a quick note that below I focused only on ideas that a) demonstrated Kroger's commitment to continue moving beyond brand names and b) also felt would potentially impact both revenue and earnings. I intentionally left out changes such as home delivery and a more efficient in-store experience (e.g. ClickList). While these are needed, I believe they would only improve revenue and not the bottom line (especially home delivery).
I realize this article is lacking in the normal financials and/or technicals, but those have largely been covered elsewhere recently. The bear case has been loudly drummed that Kroger is completely at the mercy
