Kroger’s second quarter profits fell almost $50m compared to 2003 and the US grocery retailer is considered to be in danger of missing its 2004 sales targets following the effects of a Southern California labour dispute which ended in February, according to media reports.

Net profit for the quarter was $142.4m, reduced by $15.3m, following the company’s decision to pay off debt early for £750m, due to be redeemed next March.

Total sales for the second quarter increased 5.1% to $13bn, while profits for the first-half totalled $405.3m on sales of $29.9bn. A year ago profits for the first half reached $541.9m on sales of $28.6bn.