Operations Overview
Food stores are our primary business and account for approximately 95% of total company sales. Our convenience and jewelry stores and manufacturing facilities contribute the remainder of total sales. The information below is current as of August 13, 2005.

• We operate 2,515 grocery retail stores in 32 states under nearly two dozen banners. Our formats include supermarkets, price-impact warehouse stores, and multi-department stores, which are similar to supercenters, but offer an expanded variety of national brand appeal and general merchandise.
• We hold the #1 or #2 position in 40 of our 52 major markets. A major market for Kroger is one with 9 or more Kroger stores.
• Kroger also operates 791 convenience stores under six banners in 16 states. Our C-stores provide valuable synergies for the rapid expansion of our supermarket fuel centers.
• 431 fine jewelry stores under names like Fred Meyer Jewelers, Littman Jewelers, Barclay Jewelers, and Fox's Jewelers. This is a high-margin business with good cash flow.
• Kroger is the only major U.S. supermarket company to operate an economical three-tier distribution system.
• Kroger also operates 42 food processing or manufacturing facilities producing high quality private-label products that provide value for customers and enhanced margins for Kroger.
• Kroger operates 559 supermarket fuel centers, which are a natural addition to our one-stop-shopping strategy.
• Kroger's 1,909 pharmacies, located in our combination food and drug stores, provide high quality services at everyday low prices.
  
  

  FY 2004 FY 2005   1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr Store Count - Beginning of Quarter 2,532 2,536 2,530 2,531 2,532 2,524 New Stores 14 10 8 9 10 8 Stores Acquired - New 6 1 7 1 1 0 Stores Acquired - Relocations 0 2 0 1 0 0 Relocations 6 2 6 6 3 3 Sub-Total 26 15 21 17 14 11 Expansions 6 9 9 8 2 3 Sub-Total 32 24 30 25 16 14 Operational Closures (16) (17) (14) (9) (19) (17) Store Count - End of Quarter 2,536 2,530 2,531 2,532 2,524 2,515   Food Store Square Footage - End of Quarter (millions) 140.2 140.3 140.8 141.4 141.5 141.5   Remodels 44 33 33 25 34 21   FY 2004 FY 2005 Supermarket Formats 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr Combo Stores 2,256 2,248 2,248 2,245 2,235 2,224 Marketplace Stores 17 22 22 24 24 26 Multi-Department Stores 128 123 122 123 123 123 Price-Impact Warehouse Stores 135 137 139 140 142 142 Total Supermarkets 2,536 2,530 2,531 2,532 2,524 2,515   FY 2004 FY 2005   1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr Convenience Stores 794 792 792 795 793 791 Jewelry Stores 439 439 439 436 432 431 Supermarket Fuel Centers 487 502 520 536 551 559 Pharmacies 1,879 1,889 1,889 1,898 1,907 1,909