What's going on?

US grocery king Kroger�s crown was knocked askew on Thursday: its shares fell 10% after it reported a worse-than-expected quarter and reminded investors of the unpredictable nature of grocery goings-on.

What does this mean?

Kroger�s fourth quarter fell short of both investors� revenue and profit predictions. As in previous quarters, the company�s major investment in new technology and modernizing many of its 3,000 stores caused disruption. That disruption hit sales � and brought with it additional costs which meant Kroger�s profit was lower than the same time last year, too.


Alas, Kroger�s predictions for 2019 were equally disconcerting. Its expected profit was below what investors had forecast � giving some of them further reason to make Thursday the stock�s sell-by date.

Why should I care?

The bigger picture: Amazon can change industries quickly.

Kroger�s update may have refocused investors� attention on grocery, a sector where Amazon (who else?) is causing tectonic shifts. Just a couple of years after the bargain book-born behemoth gobbled up Whole Foods, Amazon is reportedly launching a cheaper chain of convenience stores � likely aiming to capture customers that high-end Whole Foods overlooks, but which Kroger, Aldi, and Lidl are bitterly fighting over. Kroger�s stores are primarily in America�s east, however, and Amazon�s starting out west, which may offer it some respite � for now.

For markets: Grocery draws closer.

Investors care what Amazon�s doing because it accounts for 3% of the US stock market � something passive investors probably own a slice of, no matter where they�re based. It�s been in retail since 1994 but makes most of its money today from cloud computing � highlighting how difficult it can be to turn a decent profit in retail, even online. With Amazon�s reputation for low prices, things are only likely to get harder for grocers. In the UK, low profits are pushing rivals to attempt mergers; Stateside, they led to discount chain Dollar Tree slashing the valuation of its struggling Family Dollar brand by $2.7 billion on Wednesday.