U.S. supermarket operator looking for ways to cut costs, raise wages
(Reuters) — Kroger, the biggest U.S. supermarket operator, said on Monday it would make a contribution of up to $1 billion to its under-funded benefit plans.
The company will issue debt to pay for its pension liability, Kroger said in a regulatory filing, adding its overall balance sheet obligations will not change.
Kroger said contributions to the plan are "strategic opportunities" due to the current interest rate environment and potential changes to the U.S. tax code, among others.
Certain benefit balances of the fund could be transferred to other retirement plan options or a lump sum payout.
Kroger, which had total debt of $13.44 billion as of May 20, said it would incur a one-time expense following the settlement, but noted that the expense would not affect its 2017 earnings forecast.
Last month, Kroger slashed its full-year earnings forecast as inventory accounting charges and labor costs rose amid an intensifying price war.
The company, which has been looking for ways to cut costs as it selectively raises wages to retain workers, last month said talks with labour unions would be challenging as it aims to maintain "competitive cost structures."
Shares of the grocer were flat in early trading on Monday.
