NEW YORK (AP) — The Kroger Company increased sales in the fourth quarter of 2011 but reported a net loss, in part because of a big payment the company made to consolidate pension plans for union workers.
The nation’s biggest supermarket chain, which operates Kroger, Ralphs, Food 4 Less and other grocery stores, says revenue from stores open at least a year was 4.9% higher during the fourth quarter than it was during the comparable quarter in 2010. Total sales increased 7.7%, to $21.4 billion.
Excluding results from its fuel stations, which are subject to volatility and not considered part of the company’s core business, sales increased 5%.
But Kroger, Cincinnati, says it lost $307 million during its fourth quarter, which ended Jan. 28. The company reported a profit of $279 million for the fourth quarter of 2010.
One major one-time item was a $650 million contribution that Kroger made to a new pension fund in January.
Kroger announced in December 2011 that it would merge four of its employees’ pension funds into a new fund at the start of the calendar year. Although the move led to a big charge, Kroger said it expects the fund streamlining to reduce costs over the long term.
Kroger Chief Executive Dave Dillon said he thinks earnings will rise this year.
“All of the data we are seeing suggests the overall economy and customer sentiment are improving,” Dillon said in a conference call with analysts. “Both give us reason to be optimistic.”
But he added that consumer sentiment is fragile and subject to change.