Sale on milk and eggs: Kroger cuts outlook amid price fight

NEW YORK (AP) — Intense competition among grocers is forcing Kroger to slash prices on popular items like milk and eggs – staples that help sway where shoppers go.

The company, which operates Fred Meyer, Ralphs and Fry's, today reported its second straight quarter of declining sales after more than seven years of uninterrupted growth. It also cut its profit outlook for the year, citing the moves it's making to adapt to the "upheaval" in food retailing and to keep prices competitive.

Kroger said it had to respond when rivals in some regions ran "hot features" on milk and eggs during the first quarter. The Cincinnati company stressed that it does not plan to "lose on price."

"We're going to react, and not allow our customers to think they have to go somewhere else for the best value for those products," Chief Financial Officer Michael Schlotman said during a conference call with analysts.

The pressure comes amid a price fight among grocers. German discounter Aldi has been aggressively expanding, while its European rival Lidl opened its first 10 stores in the U.S. this week with specials for 39-cent croissants and 79-cent chocolate bars.

The two chains have taken market share in the United Kingdom, and are looking to repeat that success in the U.S. with their no-frills stores that focus on affordable house-brand products. Grocery giant Walmart has also been working on lowering prices.

More broadly, Kroger executives acknowledged the big changes in how people are getting their food. Online leader Amazon is expected to continue expanding its grocery business, and meal-kit delivery companies like Blue Apron are aggressively trying to enlist new customers.