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But at some point reasons turn into excuses. When sales and profits failed to meet forecast in the first quarter, analysts blamed the payroll tax hike and late tax refunds. The company also failed to meet analyst estimates in the fourth quarter of last year.
So far this year, Wal-Mart shares are up slightly less than 10%, against a 26% gain for the
Dow Jones Industrial Average.
Costco(COST) shares are up 13.5% and
Target(TGT) is up 16.5%.
Kroger(KR - Get Report) is up 47%.
At $96 billion in annual sales, Kroger is just 22% of Wal-Mart's size. But its sales are up 26% over the last three years, against 15% for Wal-Mart.
While Wal-Mart has famously been moving into fresh groceries over the last years Kroger, based in Cincinnati, has been increasing its sales of department store merchandise. It does this by copying the layout of its successful Fred Meyer stores in Oregon in other markets, like the Kroger Marketplace stores in Texas and Dillons Marketplace stores in Kansas.
The Dillon name is important here, because the CEO of Kroger, since 2003, has been David Dillon, part of the grocery family acquired by Kroger in 1983. Dillon has a law degree from Southern Methodist, but more important may be his Univerity of Kansas degrees in accounting and business administration. And there's his family heritage.
David Dillon, you see, is a fourth-generation grocer. A family history,
printed in the home town Hutchinson News recently, describes a dynasty of men happy to copy other stores' innovations, from employee stock purchases to bakeries. Kroger made its first attempt to buy out the Dillons in 1957, and while they finally succeeded in 1983, it's more like the Dillons conquered Kroger.
While Wal-Mart builds supercenters to which people have to drive, Dillon's strategy has been to build smaller markets closer to customers. While Wal-Mart mainly operates under two brands -- the Wal-Mart department stores and Sam's Club warehouse stores -- Kroger operates under dozens.