Safeway Inc. (SWY), The Kroger Co. (KR): Loyalty Programs Are Working for This Retailer

The company has enjoyed a 120% increase in app users and a 45% increase in The Kroger Co. (NYSE:KR).com visitors. It’s also supporting fishery projects and seafood initiatives to gain consumer confidence and improve its fresh image.  And while The Kroger Co. (NYSE:KR) is starting to see some positive return from these efforts, it may be some time before an investor sees any meaningful impact in its financial results.  As of now, Safeway is better positioned for positive returns.

Another competitor, SUPERVALU INC. (NYSE:SVU), has recently signed an agreement to sell 877 stores across the banners of Albertsons, Acme, Shaw’s, and Star Market to AB Acquisition, an affiliate of a Cerberus Capital Management. The company has also sold its wholly-owned subsidiary New Albertsons Incorporated to AB.  Cerberus believes its expertise in retail can turn around these struggling stores.

Further, an investor group has purchased up to 30% of SUPERVALU INC. (NYSE:SVU) stock for $4 per share. And while that offer sets the floor for the stock, SUPERVALU INC. (NYSE:SVU) is more a special situation case, than a long term holding.

Conclusion

Safeway is taking steps to implement specialized loyalty programs, invest in store remodeling, and push its private label brands. Thus far these programs are attracting traffic and increasing volumes.  You should be optimistic about the company’s potential, and given its cheap price, perhaps you should check out the stock.

Gayatri Sharma has no position in any stocks mentioned. The Motley Fool owns shares of Supervalu. Gayatri is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Loyalty Programs Are Working for This Retailer originally appeared on Fool.com is written by Gayatri Sharma.

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