Kroger Announces New $1 Billion Stock Repurchase Authorization

CINCINNATI, Jan. 18 /PRNewswire-FirstCall/ -- The Kroger Co. (NYSE: KR) announced today that its Board of Directors has authorized the repurchase of $1 billion of Kroger common stock.

The timing of the repurchases will vary according to market conditions. This repurchase authorization replaces the $1 billion stock buyback announced in June 2007, which had approximately $6 million remaining in it.

Kroger plans to use free cash flow to repurchase shares and pay dividends. The Company's share repurchase and dividend programs continue to deliver substantial value to shareholders. Since January 2000, Kroger has returned $4.8 billion in stock repurchases and $290 million in dividends to shareholders.

The Company reiterated its commitment to maintaining a leverage ratio that supports a solid investment grade rating. From January 2000 through the end of the third quarter in fiscal 2007, Kroger reduced total debt by $1.5 billion. The Company believes maintaining a solid investment grade rating provides the best cost of capital and the flexibility to execute its growth strategy in a competitive and consolidating industry.

"The new share repurchase authorization reflects our confidence in the Company's Customer 1st strategic plan and our belief that Kroger shares represent an attractive investment opportunity," said David B. Dillon, Kroger chairman and chief executive officer.

Kroger, one of the nation's largest retail grocery chains, is honored to celebrate its 125th anniversary in 2008. The Company's more than 310,000 associates serve customers in 2,487 supermarkets and multi-department stores in 31 states under two dozen local banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, QFC and City Market. Kroger associates also serve customers in 782 convenience stores, 405 fine jewelry stores and 678 supermarket fuel centers the Company operates. The Company also operates 42 food processing plants in the U.S. Headquartered in Cincinnati, Ohio, Kroger focuses its charitable efforts on supporting hunger relief, health and wellness initiatives, and local schools and grassroots organizations in the communities it serves. For more information about the Company, please visit our web site at www.kroger.com.

This press release contains certain forward-looking statements about the future performance of the Company. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Such statements are indicated by the words "plans," "commitment," and "believes." Our plans to use free cash flow to repurchase shares and to pay dividends, and our ability to maintain a solid investment grade rating, will depend on our ability to generate free cash flow, which will be affected by increased competition, weather and economic conditions, interest rates, goodwill impairment, the success of programs designed to increase our identical supermarket sales without fuel, and labor disputes, and the extent to which repurchases can be made and dividends be paid while still maintaining a solid investment grade rating. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially. We assume no obligation to update the information contained herein. Please refer to Kroger's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties.