Tough times for consumers are good times for Ralphs’ parent

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Ralphs shoppers may lament the grocery chain’s new cutback on double-couponing, but the company’s parent today showed why the need for that particular promotional hook has lessened: Struggling consumers are coming through the doors for other reasons, including for cheaper store-brand goods -- and because they can’t afford to eat out.

Kroger Co., which owns Ralphs, Kroger, Food 4 Less, Smith’s and other chains nationwide, reported quarterly earnings that beat expectations, sending its shares up 7% for the day.

Cincinnati-based Kroger told analysts during a conference call that it’s benefiting as more cash-strapped consumers turn to its less-expensive store-brand items in place of brand-name products.

What’s more, people apparently aren’t kidding when they say in consumer surveys that they’ve stopped going to restaurants.

Here’s what Kroger’s CEO, David Dillon, said on the call: ‘When we dissect some of our data and we look at our very best customers, [they] are buying both more Kroger brand and more national brand, not just more Kroger brand. And 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.’

That trend helped drive Kroger’s earnings to $386 million, or 58 cents a share, in the quarter ended May 24, up 15% from a year earlier. Sales jumped 11% to $23.1 billion. Analysts had expected profit of 55 cents a share.

The company said it expected full-year profit to be up as much as 12% from 2007. And in an economy where many companies will be hard-pressed to show much or any profit growth this year, Kroger’s double-digit promise rang Wall Street’s bell: The stock jumped $1.82, or 7%, to $27.82. It’s now up 4.2% this year, compared with a drop of 10.5% for the Standard & Poor’s 500 stock index.