SecProbe.io

CORRESP
1
filename1.htm

THE KROGER CO.

1014 VINE STREET   •
CINCINNATI, OHIO  45202-1100

  PAUL W. HELDMAN

  EXECUTIVE VICE PRESIDENT,

  SECRETARY AND

  GENERAL COUNSEL

  513-762-4421

  FAX 513-762-4935

  FAX 513-762-4554

August 22, 2008

VIA
EDGAR CORRESPONDENCE

H.
Christopher Owings

Assistant
Director

Securities
and Exchange Commission

Division
of Corporation Finance

100
F Street, N.E.

Washington,
DC 20549

  Re:

  The
  Kroger Co.

  Form 10-K
  for Fiscal Year Ended February 2, 2008, filed April 1, 2008

  Form 10-Q
  for Quarter Ended May 24, 2008, filed July 2, 2008

  Definitive
  Proxy Statement on Schedule 14A, filed May 15, 2008,

  File
  No. 001-00303

Dear
Mr. Owings:

The
Kroger Co. (the “Company”) submits this letter in response to the comments from
the Staff of the Division of Corporation Finance (the “Staff”) of the
Securities and Exchanges Commission (the “Commission”), received by letter
dated July 31, 2008 relating to the above referenced Form 10-K, Form 10-Q
and definitive proxy statement.  Set
forth below are the Staff’s comments followed by our responses.

Form 10-K
for Fiscal Year Ended February 2, 2008

Signatures,
page 77

1.                                       The Form 10-K
must be signed by your principal financial and principal accounting officers in
their individual capacities.  See General
Instruction D to Form 10-K.  In this
regard, please confirm that Mr. Schlotman and Ms. Van Oflen signed
this Form 10-K in their individual capacities.  Please also confirm that you will in the
future revise your signature page to reflect that the principal executive, financial
and accounting officers have signed the periodic report in their individual
capacities.

Company
Response:

The
Company confirms that Mr. Schlotman and Ms. Van Oflen did sign the Form 10-K
in their individual capacities.  In
future filings, the principal executive, principal financial and principal
accounting officers’ signatures will be reflected under the second set of
signature blocks to evidence execution in their individual capacities.

Exhibits
31.1 and 31.2

2.                                       The
certifications must correspond exactly to those set forth in Item 601(b)(31) of
Regulation S-K.  In this regard, you did
not include the parenthetical in paragraph 4.(d).  Similarly, you did not include the
parenthetical in the certifications filed with the Form 10-Q for the
quarter ended May 24, 2008.  Please
revise.

Company
Response:

Future
filings of the Exhibit 31 certifications will include the parentheticals.

Definitive
Proxy on Schedule 14A

Compensation
Discussion and Analysis, page 15

3.                                       We note that
individual officer performance is an important factor in determining
compensation.  Please disclose how the
specific forms of compensation are structured and implemented to reflect each
named executive officer’s individual performance and/or individual contribution
to these items of the registrant’s performance, describing the elements of
individual performance and/or contribution that are taken into account.  See Item 402(b)(2)(vii) of Regulation
S-K.

Company
Response:

Individual
performance is an important factor that the Compensation Committee considers in
determining NEO salary, annual bonus awards and equity awards.  As described on page 16 of the proxy
statement, as part of its annual review of executive compensation, the
Committee considers each NEO’s current compensation, internal equity
considerations, a report from the Committee’s independent compensation
consultant, and historical compensation information for the prior three
years.  As noted on pages 18 and 21
of the proxy statement, the individual performance of each NEO was considered
by the Committee (or independent directors in the case of our CEO) when
determining his salary and equity awards for 2007.

The
Committee also considers recommendations from the CEO.  Our CEO makes compensation recommendations
for each of the other NEOs based on the same considerations, as well as the CEO’s
assessment of individual job performance and contribution to the management
team.  While the Committee’s decisions
regarding salaries, bonus opportunities and equity awards are not specifically

2

tied
to the achievement of individual performance goals, the Committee subjectively
considers the individual performance of each NEO when making such
determinations.

In future filings, we will
include, to the extent material, a concise discussion of the key considerations
of individual performance affecting NEO compensation.

4.                                       You have not provided a quantitative discussion of all of the terms of
the necessary targets to be achieved for your named executive officers to earn
their performance-based annual and long-term cash bonuses.  For example, for annual cash bonuses you have
not disclosed the identical sales targets, EBITDA target, measures for implementation
and results under your strategic plan, and performance of new capital projects
compared to their budgets established by the compensation committee.  For long-term cash bonuses, you have not
disclosed the targets for improving performance based on customer survey
results, reducing total operating costs as a percentage of sales, and improving
performance in key attributes measuring associate satisfaction.  Please disclose the specific performance
targets used to determine incentive amounts or provide a supplemental analysis
as to why it is appropriate to omit these targets pursuant to Instruction 4 to
Item 402(b) of Regulation S-K. To the extent that it is appropriate
to omit specific targets, please provide the disclosure pursuant to Instruction
4 to Item 402(b).  General statements regarding
the level of difficultly, or ease, associated with achieving performance goals
either at the corporate or individual level are not sufficient.  In discussing how likely it will be for the
company to achieve the target levels or other factors, provide as much detail
as necessary without providing information that poses a reasonable risk of
competitive harm.  We note that the 2008
performance-based cash bonus plan will replace the 2006 plan.  See Question 118.04 of Compliance &
Disclosure Interpretations on Regulation S-K at http://www.sec.gov/divisions/corpfin/guidance/regs-kinterp.html.

Company
Response:

The Company did not disclose
the specific goals in its proxy statement.
The Company does not believe such information is material to investors
because, while the Committee and the board of directors establish criteria for
calculating annual and long-term bonus payments to the NEOs, the amount of
bonus earned can be reduced at the discretion of the Committee (or in the case
of the CEO, the board).  They also have
the discretion under the plan to adjust the targets during the year in the
event of unanticipated developments.  In
addition to quantitative factors, the Committee and the board consider
qualitative factors as they deem appropriate, and have complete discretion to
reduce payments to the NEOs irrespective of any quantitative calculation.

Furthermore,
the specific criteria used in determining bonus amounts are not material within
the context of the Company’s executive compensation policies or

3

decisions
as a whole, considering the various other elements of compensation, including
salary, restricted stock and stock option awards, retirement plans, deferred
compensation, severance and continued healthcare benefits, and perquisites, and
considering all of the various qualitative and quantitative factors that
influence each of these other elements of compensation.  We do not believe that the disclosure of specific
targets used in determining bonus amounts is material to an investor’s overall
understanding of the Company’s compensation objectives and policies.

In addition, Instruction 4
to Item 402(b) states that registrants are not required to disclose target
levels with respect to specific quantitative or qualitative performance-related
factors considered by the compensation committee or the board of directors, or
any other factors or criteria involving confidential trade secrets or
confidential commercial or financial information, the disclosure of which would
result in competitive harm for the registrant.  The standard to use when determining whether
disclosure would cause competitive harm for the registrant is the same standard
that would apply when a registrant requests confidential treatment of
confidential trade secrets or confidential commercial or financial information
pursuant to Securities Act Rule 406 and Exchange Act Rule 24b-2.

The Company did not disclose
the specific goals because such information is sensitive commercial and
financial information that could cause it competitive harm in the hands of
competitors.  The Company has not
disclosed these performance objectives to the public and keeps this information confidential. Disclosure
of the Company’s specific performance targets would be tantamount to disclosure
of the Company’s business plan and long-term strategic plan.  Competition in the retail food and drug
industry is intense, and disclosure of specific goals could give competitors
insight into the Company’s operating strategy and allocation of resources.  With respect to the portion of the bonus
related to the Company’s performance of our Customer 1st strategic
plan, the measures
themselves are based in part on proprietary methods of customer research and in
part on specific operational goals, the disclosure of which would reveal our
strategy to our competitors.
Furthermore, disclosure of the precise performance of the Company
against specific measures in our Customer 1st strategic plan could guide
competitors to their own strategies to target these areas to the detriment of
the Company and our shareholders.

The foregoing demonstrates
that disclosure of the bonus targets would result in disclosure of the Company’s
business plan and that confidential treatment is appropriate in accordance with
the staff’s guidance for confidential treatment set forth in Staff Legal
Bulletin No. 1A (with Addendum Jul. 11, 2001), Confidential
Treatment Requests.  It is
clear that disclosing the information would cause competitive harm to the
Company, that disclosure of the confidential information is not necessary for
protection of investors (because the information is not material to the
compensation of the NEOs or to the Company’s executive compensation policies
and decisions as a whole), and that the Company has

4

otherwise kept the
information confidential.  Accordingly,  disclosure
of specific performance targets is not required under the SEC’s executive
compensation rules.

We acknowledge that if a
company omits performance targets, it is required to discuss how difficult it
will be for the executive or how likely it will be for the company to achieve
the undisclosed target level or criteria.
Accordingly, in future filings, the Company will disclose that the strategic portion
of the plan has been adjusted each year to increase the emphasis on those
elements of the plan that have proved most challenging, increasing the
difficulty of achieving higher levels of bonus and increasing incentives to meet
the most significant challenges.  In
future filings, the Company will also provide a concise discussion of the
degree of difficulty inherent in achieving the identical sales and EBITDA
targets in our annual bonus plan.

Summary Compensation Table, page 24

5.                                       In footnote
three, separately quantify the amounts attributable to each of the change in
pension value and preferential earnings on nonqualified deferred
compensation.  See Instruction Item 3 to
Item 402(c)(2)(viii) of Regulation S-K.

Company Response:

The Company believes that the amounts in footnote
three to the Summary Compensation Table are specifically quantified because the
only named executive officer for whom preferential earnings were received was Mr. McMullen,
and the amount of those earnings, as well as his change in pension value, are
both disclosed.  The amounts reflected in
the table for all other NEOs are for change in pension value only.  We will endeavor to clarify this in future
filings.

6.                                       Please disclose
the maximum possible payouts under the non-equity incentive plan. See Item 402(d) of
Regulation S-K.

Company Response:

Payouts under the Company’s
performance-based 2006 Long-Term Bonus Plan and performance-based 2007 annual
cash bonus program are subject to the terms of the Kroger Cash Bonus Plan,
adopted by shareholders in 2007, which plan provides that no single bonus to a
participant may exceed $5,000,000.

In 2008, the Company’s
shareholders approved the 2008 Long-Term Incentive and Cash Bonus Plan, under
which both annual and long-term cash bonus amounts will be paid in the
future.  By the terms of the 2008 plan,
no single cash bonus to a participant may exceed $5,000,000.  In future filings, this limitation will be
disclosed.

5

The Company acknowledges the
following:

·                  the Company is responsible
for the adequacy and accuracy of the disclosure in the filings;

·                  staff comments
or changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the filings; and

·                  the Company may
not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.

If
you should have any questions or require any further information regarding this
matter, please contact the undersigned at 513-762-4421.

  Sincerely,

  /s/
  Paul Heldman

  cc:

  Ronald
  E. Alper, Staff Attorney

  Ellie
  Bavaria, Special Counsel

  David
  B. Dillon

  J.
  Michael Schlotman

  M.
  Elizabeth Van Oflen

  Bruce
  Gack

  Christine
  S. Wheatley

6