Why Kroger's 'Biggest Issue' Is Wal-Mart

Jill Malandrino was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Kroger Co KR, set to post quarterly results Thursday, is faced by competitive threats from Wal-Mart Stores, Inc. WMT, TheStreet's OptionsProfits Product Development Manager Jill Malandrino told Benzinga.

"Their biggest issue is remaining competitive with your larger super stores like Wal-Mart," Malandrino said.

Kroger said in March that Wal-Mart is among Kroger's top two competitors in 15 of its 20 sub-markets. Kroger added that its share increased in all 15 of those markets last year.

Kroger's total market share increased by 60 basis points in 2014, including an increased share in 18 of its sub-markets and and a slight decline in two, according to Kroger, which cited Nielsen data.

Wal-Mart's grocery segment accounted for about 56 percent of its U.S. segment sales last year, unchanged from 2013. Health and Wellness, which includes pharmacy and over-the-counter drugs, amounted to 11 percent of Wal-Mart U.S. sales last year, up one percentage point.

The two categories combined amounted to 64 percent of Wal-Mart's Sams' Club sales in 2014, when total Wal-Mart sales topped $485.65 billion.

Kroger sales last year were $108.47 billion.

Wall Street analysts on average expect Kroger will post first quarter earnings of $1.21 a share on sales of $33.26 billion.

Kroger has beaten Wall Street's earnings expectations in each of the past four quarters.