Recession Hits Kroger

People's spending habits change during recessions.  The grocery industry has been called "recession proof" because during tough economic times people eat out less, shoppers are going to a one-stop place like a Kroger store to buy food instead of multiple outlets in order to save fuel, and instead of going out for fun more people are entertaining at home, meaning that they will grocery shop for party favors and refreshments.  However even though consumers are shopping at grocery stores more during these tough times, Kroger has still been impacted by the recession.  For example, consumers are buying lower cost generic items that have resulted in lower overall earnings in the grocery industry.  In a previous blog I discussed the new online coupons that Kroger now offers.  This new strategy was a direct result of Kroger trying to improve its earnings by getting more shoppers in their stores and buying more branded (both store and national) products.

Here is an excerpt from the article in the attached link that discusses Kroger's stock averages. "The recession seems to have hit Kroger hard, as the equity is currently pinned beneath long-term resistance from its 10-month and 20-month trend lines -- the latter of which has capped the grocer's progress since November 2008.  However, from a shorter-term perspective, Kroger appears to have staged a rally, inching slowly, but steadily, higher since early June. Along the way, the stock regained the support of its 10-week moving average, and is currently attempting to overtake its 20-week counterpart.  Kroger has not closed a week above this duo since April 23". http://www.schaeffersresearch.com/commentary/content/the+kroger+co+makes+plans+to+combat+the+recession+--+and+technical+resistance/observations.aspx?ID=101362