UFCW LOCAL 1995 AND THE KROGER CO. REACH NEW COLLECTIVE BARGAINING AGREEMENT

CINCINNATI, OH, July 2, 2004 -- The Kroger Co. (NYSE: KR) and UFCW Local Union 1995 announced today that a new four-year labor agreement had been ratified. The new agreement covers approximately 9,500 Kroger employees in Eastern Tennessee, Southern Kentucky and Northern Alabama.

The new agreement will provide wages and benefits that will allow Kroger to compete with other retailers in the market.

“This agreement represents a balanced solution that provides our associates with the high-quality health care and a competitive wage they need, at a cost that is fair to everyone involved, including Kroger customers,” said John Hackett, President of Kroger’s Mid-South Division. “No one provides better service than Kroger, and that is done by the great work of our associates.”

“By working together, Kroger and the UFCW were able to secure a new agreement that provides not only a high-quality health care plan, but additional pension funding that protects pension benefits,” said Joe Ellis, President, UFCW Local Union 1995.

Headquartered in Cincinnati, Ohio, Kroger is one of the nation’s largest retail grocery chains. At the end of the first quarter of fiscal 2004, the Company operated (either directly or through its subsidiaries) 2,536 supermarkets and multi-department stores in 32 states under two dozen banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith’s, Fry’s, Fry’s Marketplace, Dillons, QFC and City Market. Kroger also operated (either directly, through its subsidiaries, franchise agreements, or operating agreements) 794 convenience stores, 439 fine jewelry stores, 487 supermarket fuel centers and 42 food processing plants. For more information about Kroger, please visit our web site at www.kroger.com.

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