Peter Logue: When you do transfer that product, do you lower the cost to the customer, as it is now, I would assume, not as fresh?

Robert Fields: We are operating all the stores under the same umbrella. It is the Kroger Company, and basically we pass on the same cost that that division bought it at to the next division. There are limits of course. We are not going to send a problem to another division and create another problem. Your first loss is your best loss, so if you are going to have to discount, you might as well do it in the division where the problem began.

William Sherwood: It sounds like your transportation company, Emery, is going to manage the whole inventory for your seafood business to the point of buying and selling and shifting and making all the decisions because they have the computer system.

Robert Fields: They have the technology. That is correct. The Kroger Company is going to continue to negotiate cost and product specifications, but Emery is going to turn into more or less an order placer, which will take the orders from my stores and distribute them out to different suppliers.



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