Coupon cuts, profit bumps

News of Ralphs tightening up its double-coupon policy happened to come on the same day that the chain's parent company, Kroger Co., reported better-than-expected quarterly earnings. There's nothing nefarious about any of it - just the reality that Ralphs is expected to generate nice traffic without the coupons. Companywide, Kroger CEO David Dillon said in a conference call that consumers are eating out less and looking for cheaper private-label items.

"When we dissect some of our data and we look at our very best customers, our very best customers are buying both more Kroger brand and more national brand, not just more Kroger brand. And we take from that, we believe that the way to read that is that there’s of course a shift from restaurants and other places to buying more food in our stores. We think there’s a shift to preparing food at home more, and we think our new product introductions in the categories like the private selections that we mentioned help contribute to that."

The company expects full-year profit to be up as much as 12 percent from 2007, which goes to show that in bad times it's best to stick to the basics - like eating. As posted by Tom Petruno at Money & Co., shares of Kroger jumped 7 percent on the positive earnings news. This morning, it's up almost 5 percent.