Reinventing Kroger: How America’s Largest Supermarket Chain Is Navigating a Grocery Revolution

Illustrative Picture - Fred Meyer Vegetable/Fresh Section (20901 State Route 410 E, Bonney Lake, WA)

On a recent morning in Florida, a Kroger delivery van winds through a neighborhood where the supermarket giant has no physical stores. It’s a scene that encapsulates Kroger’s audacious experiment in the digital age: reaching customers well beyond the footprint of its brick-and-mortar supermarkets. Over the past decade, The Kroger Co. – America’s largest traditional grocer – has been on a transformative journey, striving to modernize its 140-year-old grocery business for a new era. From revamping aisles and acquiring regional chains to pouring billions into online operations and automated warehouses, Kroger’s story is one of a company scrambling to defend its turf amid seismic shifts in how Americans shop for food. It’s a tale with equal measures of bold innovation and daunting challenges, playing out in an industry more competitive than ever.

The Nation’s Grocer in an Era of Fierce Competition

Kroger today presides over a coast-to-coast network of about 3,000 supermarkets operating under two dozen banners – from Ralphs in California to Harris Teeter in the Carolinas – and holds the largest share of the U.S. supermarket sector at roughly 16–17%. By virtue of its size, the Cincinnati-based company is often dubbed “the nation’s grocer.” Yet that incumbency has come under growing pressure. Over the past five years, Kroger’s slice of the overall U.S. grocery pie has slipped from about 9.8% to 8.5% according to industry data, even as total revenue climbed to $150 billion in 2024. In fact, Kroger and fellow supermarket giant Albertsons were the period’s biggest share losers – a stark reality that “underscores why the two were trying to combine forces” in a blockbuster merger attempt.

That attempted merger, a proposed $25 billion tie-up announced in 2022, was framed by Kroger’s leadership as an urgent response to an “existential” competitive threat. The threat wasn’t from each other, but from the heavyweights of American food retail: Walmart, Costco, Amazon, and hard discounters like Aldi. Walmart’s lead in grocery is so commanding – about 21% of the U.S. market, larger than Kroger’s and Costco’s shares combined – that even the fusion of Kroger and Albertsons would only “just barely” have edged out Walmart in sales. Regulators ultimately balked, suing to block the deal on antitrust grounds, and by late 2024 the merger was dead in the water. Kroger entered 2025 still very much a standalone company, left to prove it can compete on its own terms.

Competition is nothing new to Kroger – this is a company that has weathered grocery wars since the 19th century – but the current landscape is particularly unforgiving. Traditional supermarket chains are “holding the line or declining”in market share as value-oriented and specialty grocers gain ground. Walmart’s supercenters and Costco’s membership warehouses have relentlessly siphoned away middle-American shoppers with low prices and one-stop convenience. At the higher end, regional stars like Publix and H-E-B command fierce loyalty through superior service and fresh offerings; notably, Publix has been the rare conventional grocer to gain share in recent years, buoyed by strong expansion and enviable profit margins. And from the fringes, deep-discount chains Aldi and Lidl are aggressively expanding, while e-commerce players reshape consumer expectations.

For Kroger, these trends have meant that simply “treading water” has been an accomplishment, and even that has required reinvention. Over the past decade, Kroger embarked on a strategic makeover of its core grocery operations. It acquired prominent regional chains – notably Harris Teeter in 2014 and Roundy’s (Mariano’s) in 2015 – to extend its geographic reach and absorb new ideas. Harris Teeter, for example, brought Kroger a well-developed curbside pickup program and a foothold in the booming Southeast. Internally, Kroger launched a sweeping initiative called “Restock Kroger” in 2018, aiming to refresh stores, optimize supply chains, and leverage data to “widen and deepen our competitive moats,” as CEO Rodney McMullen described it. In practice, Restock meant hundreds of store remodels, price investments to narrow the gap with Walmart, and a push to elevate fresh departments and private-label brands. Kroger’s store-brand lines – from the value-oriented Kroger brand to premium “Our Brands” like Simple Truth organic – have been a bright spot, achieving strong growth as shoppers seek value amid food inflation. By late 2020, as pandemic demand surged, Kroger credited its transformations in Fresh and Own Brands with helping “bolster its share of food-at-home spending” during the COVID boom.

Despite these efforts, Kroger’s traditional supermarket business remains a low-margin endeavor with little room for error. In a typical year, the company’s operating margins barely reach 2%. Net profit margins hover around 1–2%, placing Kroger near the bottom of its peer group on profitability. For example, in 2025 Kroger captured an estimated 16.7% of U.S. supermarket sales but only about 1% of the sector’s profits, according to IBISWorld data. By contrast, the much smaller Publix (with roughly 7% market share) regularly delivers net margins above 7%, giving it far more profit dollars than Kroger despite less than half the sales volume. This profit pressure is a perennial concern for Kroger’s investors and lenders. It also underscores the appeal of Kroger’s ancillary businesses – ranging from pharmacy and fuel sales to financial services and retail media – which offer higher-margin revenue streams to supplement the thin grocery profits. In recent years Kroger has enthusiastically grown these “alternative profit” businesses, such as selling consumer data insights through its 84.51° analytics arm and running a retail media network that monetizes advertising on its digital platforms. These initiatives are valuable precisely because they “fuel Kroger’s margin-rich businesses” in a way selling milk and eggs cannot.

Betting on Bytes: Kroger’s Digital Transformation

If the first act of Kroger’s reinvention centered on its stores, the second act has been all about going digital. Nowhere has Kroger’s ambition – or anxiety – been more evident than in its race to build a formidable online grocery operation to rival Amazon and Walmart. The pivot began in earnest in the late 2010s, catalyzed by a wake-up call in 2017: Amazon’s acquisition of Whole Foods Market. That deal sent shudders through every supermarket stock, Kroger included, as it signaled that the e-commerce juggernaut had designs on the grocery industry. Kroger’s response was bold: in 2018, it inked an exclusive U.S. partnership with UK-based Ocado, one of the world’s most advanced online grocery fulfillment companies. The plan was to construct a network of futuristic, robot-powered warehouses to fulfill online orders – leapfrogging the manual, store-based picking model that most rivals were using. As part of the deal, Kroger took a small equity stake in Ocado and committed to building 20 automated “customer fulfillment centers” (CFCs) across America.

Kroger’s first such high-tech warehouse, a 335,000-square-foot facility outside Cincinnati, went live in early 2021. It was soon followed by others in locations like Orlando, Florida and Dallas, Texas. At full tilt, each CFC can process thousands of orders a day with remarkable efficiency – a single facility houses hundreds of synchronized robots(pictured) that retrieve items from a dense storage grid, enabling Kroger to handle online demand without taxing employees in its stores. This was a moonshot bet on the future of grocery shopping. “I really thought Kroger’s aspiration was to be a national grocery delivery organization… that’s what it seemed Ocado could provide,” reflects Michael Infranco, a retail analyst at RetailStat.

In parallel, Kroger scaled up more immediate digital services. The company had already rolled out curbside pickup (“ClickList”) to thousands of stores, and it partnered with third-parties like Instacart and Shipt to offer home delivery from local stores in many markets. By 2020, these efforts were coalescing into what Kroger calls its “Seamless” ecosystem – an omnichannel model letting customers shop anywhere, anytime (order online, pickup or get delivery, or just walk in the store). Strategic acquisitions supported this push, too: in mid-2018 Kroger acquired Home Chef, a meal-kit delivery company, to bolster its e-commerce offerings and even integrate ready-to-cook kits in stores. The result of all this investment was that Kroger entered 2020 far better prepared for the coming online grocery explosion than many of its peers.

That explosion came with the COVID-19 pandemic. Almost overnight, demand for “safe, low-touch” grocery shopping skyrocketed, and Kroger’s digital business went into overdrive. “We grew digital sales by triple digits in 2020,” CEO McMullen noted in early 2021 – in fact, online grocery sales surged 116% for the full year. Kroger’s e-commerce revenue leapt from around $5–6 billion pre-pandemic to over $10 billion in 2020 alone. By the end of that year, Kroger boasted 2,223 pickup sites and 2,472 delivery locations, covering 98% of households in its markets – an impressive logistical feat that helped the grocer add $10 billion to its top line in fiscal 2020. Executives credited the “proactive investments made over the last several years” in digital infrastructure for allowing Kroger to pivot quickly when COVID hit. Equally important, many customers who tried Kroger’s online services stuck with them. McMullen revealed that when shoppers engage both in-store and online, Kroger sees a 98% retention rate in its ecosystem – a validation of the omnichannel strategy.

As the pandemic boost faded, America’s appetite for online grocery stabilized at a new higher baseline. Today, online orders account for a significant share of Kroger’s business – about $13 billion in the latest fiscal year, roughly 8–9% of sales. And unlike the boom-and-bust pattern in some sectors, Kroger’s digital growth has continued to outpace its overall sales. Over the past year, the company logged +11% year-over-year growth in digital sales each quarter, even as identical supermarket sales (excluding fuel) crept up only ~2%. In other words, nearly all of Kroger’s incremental growth is coming from online channels. “Our most loyal and most profitable customers are the ones that engage with us in both modalities – digitally and in-store,” observed Kroger’s then-CFO in 2024, underscoring how vital e-commerce has become. These omnichannel shoppers spend nearly three times more than store-only customers and drive outsized gains in those alternative profit streams like retail media and financial services.

For all these gains, Kroger’s online grocery push faces a sobering reality: it is still playing catch-up to Walmart and Amazon. By one recent estimate, Walmart controls about 28–30% of the U.S. online grocery market, Amazon roughly 23%, and Kroger just around 8%. In essence, Walmart’s e-commerce grocery business alone is several times the size of Kroger’s. The gap isn’t really closing, either – in fact, Walmart’s U.S. e-commerce sales have been growing at 20%+ rates, roughly double Kroger’s pace in recent quarters. “They’re not catching the leader,” as Brick Meets Click analyst David Bishop says of Kroger’s online effort, “but they’re pulling away from the rest of the pack.” In other words, Kroger has solidified itself as the #3 player in U.S. online grocery (and the far-and-away leader among traditional grocers online), yet the #1 (Walmart) is pulling further ahead. This dynamic illustrates the broader challenge Kroger faces in the digital arena: Walmart’s advantages – a truly national store footprint for rapid fulfillment, immense scale, and a first-mover omnichannel strategy – are formidable. “Walmart has done a better job of leveraging its entire infrastructure, and that’s a significant advantage,” says Infranco, noting that Walmart’s thousands of Supercenters double as online fulfillment hubs in a way Kroger’s stores, which are absent in many regions, simply cannot match. Kroger hoped the Albertsons merger would instantly broaden its geographic coverage, but without it, the company must find other ways to extend its e-commerce reach.

One such way was Kroger’s unconventional entry into Florida – a state it had exited decades ago. Lacking any significant store base there, Kroger in 2021 opened an Ocado-powered warehouse in central Florida and set up spoke facilities to truck orders into populous areas like Tampa and Miami. It was a pure digital gambit to “sell groceries in a state where it operates just one store,” essentially testing if cutting-edge fulfillment and heavy promotion could overcome the absence of a physical presence. The early results have been mixed at best. By 2024, Kroger admitted its Florida experiment was struggling: online sales growth had moderated industry-wide as consumers returned to stores, and Kroger’s Florida service couldn’t dent entrenched rivals Publix (with 860+ stores in-state) and Walmart (300+ stores). In May 2024, the company announced it would close several of its smaller “spoke” delivery facilities in South Florida and in parts of Texas after they “did not meet the benchmarks we set for success,” a spokesperson said. Those closures, including a site near Miami and two in Austin and San Antonio, were a sobering setback to Kroger’s once-boundless e-commerce ambitions.

Indeed, by late 2023 Kroger’s leadership had begun tapping the brakes on the entire Ocado rollout. After opening about a dozen of the high-tech fulfillment centers from 2020 through 2022, Kroger paused construction of additional CFCs to focus on improving productivity at existing sites. “We’re making progress, but we wouldn’t start focusing on additional sheds until we have a clear path on the ones we have,” CEO McMullen said at the time. The massive automation project, once hailed as the grocer’s future, “had begun to sour” as e-commerce growth normalized and competitors shifted to cheaper store-based picking. By 2024, not a single new Ocado facility was opened. Kroger and Ocado instead launched an initiative (internally dubbed “Project Endeavor”) to wring more efficiency out of the existing warehousesand accelerate their path to profitability. Kroger’s digital sales still grew a healthy 12% in 2023 to roughly $12 billion, with delivery sales up 24% thanks in part to the new CFCs. But the company is openly acknowledging that these investments need to start paying off. In November 2025, Kroger went a step further, announcing plans to “pare back” its Ocado network – an implicit acknowledgment that the expensive experiment overshot in some markets. Industry observers have not missed the irony: Kroger’s bold tech gambit, championed by McMullen, is being partially unwound just as many rivals (even Amazon) pivot back to leveraging physical stores for fulfillment efficiency.

None of this is to say that Kroger’s digital foray has failed. On the contrary, the retailer has made strides in improving online profitability – a notorious challenge in grocery. In early 2025 Kroger formed a dedicated e-commerce business unit to turbocharge this effort, bringing all its digital teams under one roof. The mandate: “deploy new technology, improve density in fulfillment operations, and accelerate growth of our retail media platform,” according to CFO Gary Millerchip (succeeded by new CFO David Kennerley in 2025). Kroger reports that the first quarter of 2025 saw its “best profit improvement yet” in e-commerce – a sign that initiatives to route orders more efficiently, reduce picking and delivery costs, and optimize product mix are bearing fruit. Still, CFO Kennerley has been candid that Kroger’s overall online business remains unprofitable on a net basis. The company believes it can change that with scale and focus. “We have a terrific foundation in place in our e-commerce business… we are offering a better customer experience,” said interim CEO Ron Sargent in mid-2025, expressing confidence that profits will come.

Analysts note that Kroger is chasing a moving target: Walmart recently achieved profitability in its U.S. e-commerce division for the first time, thanks to huge volumes and booming advertising revenues on its platform. That raises the bar for everyone else. Walmart’s prowess in automation and retail media – for example, using its scale to invest in fulfillment tech and monetizing supplier ads – “puts pressure on rivals like Kroger to follow suit,” says Scott Mushkin of R5 Capital. Mushkin and others describe Kroger’s situation as a delicate balancing act. The grocer must slash costs and be more price competitive (to keep customers in a tough economy) while also investing in distribution automation and digital innovation to avoid falling further behind. At times these goals conflict. “They may want to be more disciplined with capital… but they may be forced to invest much more aggressively in [e-commerce] distribution automation,” Mushkin observes, alluding to the tightrope between trimming expenses and funding growth. Notably, as soon as the Albertsons deal collapsed, Kroger pivoted to an aggressive cost-cutting stance – announcing plans in 2025 to cut $1 billion+ in costs, close underperforming stores, and even invest in lower prices to regain competitiveness. Yet in the same breath, management has reiterated that growing the digital business (and making it profitable) is essential for the company’s long-term health.

There is one lever Kroger can pull to boost online profitability that doesn’t involve warehouses or delivery vans: retail media advertising. Selling digital shelf space and targeted ads on its grocery websites/app to consumer brands is a high-margin business, and Kroger was an early leader here through its 84.51° data unit. But even on this front, competition is heating up. “The key for retailers aiming to profit online is to focus on retail media and advertising operations,”notes Arun Sundaram of CFRA Research – and while Kroger has a solid foothold, other grocers are rapidly ramping up their own data-driven ad offerings. In addition, food manufacturers pulled back on ad spending during economic uncertainty in 2023–2024, so a rebound in that spending is needed to truly move the needle for Kroger’s margins. In short, Kroger’s digital transformation is very much a work in progress, with plenty of upside but no shortage of hurdles.

Financial Footing, Strengths and Struggles

As Kroger strives to balance its brick-and-mortar legacy with its digital future, how do the financials stack up? In many respects, Kroger’s profile is a study in contrasts. On one hand, the company generates enormous cash flow from its $150-billion revenue base – a scale that enables major investments and steady shareholder returns. Kroger has reliably grown its top line (total sales) over the past decade, from about $109 billion in 2015 to $150 billion in 2024, a trajectory boosted by acquisitions and pandemic demand surges. Even in the challenging inflationary environment of 2022–2023, Kroger managed to increase sales, though much of that was price-driven. It also posted record earnings in 2021 amid the unusual conditions of COVID (net income that year topped $2.5 billion, or 2.0% of sales, a historically high margin for Kroger). And importantly, Kroger has remained solidly investment-grade in credit quality, prized by debt investors for its stable, recession-resistant grocery cash flows. (As a point of reference, groceries are a classic defensive industry – people need to eat in good times and bad – which is why Kroger could carry a hefty debt load through the years with relative comfort. At the end of 2024, Kroger’s debt-to-equity ratio stood around 3.3, and its EBITDA covered interest expense more than 11 times, metrics typical for the sector.)

On the other hand, the razor-thin margins and intense competition cap Kroger’s profitability and growth prospects. After the pandemic windfall subsided, Kroger’s net earnings fell back to roughly 1.4–1.5% of sales (about $2.2 billion in net income for 2024). Even operating margins, which exclude taxes and some one-time costs, are stuck around 2%. Any misstep – a pricing error, a supply chain hiccup, a labor cost increase – can quickly erode those margins. In 2022, for instance, rising costs and a reversion of some COVID behaviors caused Kroger’s operating margin to dip to 1.5%, sending a jolt through investors used to its stable earnings. This structural fragility is a key weakness noted by both stockholders and bondholders: Kroger simply doesn’t have much room to boost profits unless it either grows larger (to spread fixed costs and gain bargaining power) or finds new efficiencies. The proposed Albertsons merger was, in effect, an attempt at the former – to gain scale and synergies that could lift margins. Without it, Kroger is leaning on the latter: cutting costs and driving operational efficiencies wherever possible.

From an institutional investor’s perspective, Kroger’s strengths include its dominant market position in traditional grocery, enormous revenue base, and resilient cash generation. The company pays a regular dividend (and has for decades) and frequently buys back shares, which is attractive to long-term investors seeking steady returns. Kroger’s leadership is also viewed as experienced in the grocery arena – though the abrupt resignation of CEO Rodney McMullen in 2025 amid an ethics inquiry shocked the market. (McMullen had been at Kroger for over 40 years and CEO since 2014; his departure “unrelated to the business” came just as Kroger was regrouping from the failed merger. The company named board member and former Staples CEO Ron Sargent as interim chief, and a search for a new permanent CEO is underway.) The ensuing C-suite shuffle – along with Albertsons simultaneously losing its CEO – injected some uncertainty, but also a sense that a new chapter is beginning for Kroger’s leadership.

Perhaps Kroger’s biggest strategic advantage is its sophisticated understanding of customers through data. The grocer was a pioneer in loyalty programs and analytics (through a partnership with dunnhumby in the 2000s, later fully acquired and rebranded 84.51°). This data-centric approach allows Kroger to personalize promotions at a massive scale – McMullen noted that in 2020 Kroger was delivering 11 billion personalized recommendations per week to shoppers via digital channels. That personalization not only drives sales but also cements loyalty in an era where consumers are bombarded with choices. Additionally, Kroger’s private label development and merchandising expertise are top-notch; its store brands contribute significantly to margins and differentiation. And Kroger has something many newer competitors lack: decades of hard-won operational expertise in running efficient grocery stores. This know-how, from cold supply chains to handling fresh produce, is one reason Kroger continues to post solid identical-store sales and navigate inflationary pressures relatively smoothly.

Nevertheless, weaknesses abound. Aside from thin margins, Kroger faces higher labor costs than some rivals – a large portion of its workforce is unionized under the UFCW, whereas Walmart and Amazon are not. This can raise Kroger’s cost of doing business (wages, benefits, pension obligations) and has led to occasional labor disputes. For example, in early 2022 workers at Kroger-owned King Soopers in Colorado went on strike over pay disparities, highlighting the ongoing tension between cost control and frontline worker compensation. By most accounts, Kroger’s wages have lagged behind Walmart’s increases in recent years, potentially making retention and morale a concern, though the company did boost its average hourly pay significantly in 2021–2022 under public pressure.

Another oft-cited weakness is geographical limitations. Kroger’s store network, while large, has notable gaps (no presence in the populous Northeast, for instance, and previously none in Florida). This has ceded entire regions to competitors like Ahold Delhaize (Stop & Shop, Giant) in the Northeast or Publix and Walmart in Florida. The Albertsons merger was partly meant to fill these white spaces (Albertsons has many stores in the Northeast and West). Without it, Kroger must rely on partnerships or new-market strategies (like the Florida delivery experiment) to grow outside its core regions, which, as discussed, is challenging.

From a lender’s perspective, Kroger’s creditworthiness remains solid, but there are some flags to watch. The company’s leverage ticked up during 2020 when it took on debt to fortify its balance sheet and fund strategic moves (like a large special dividend tied to the Albertsons deal, which was controversial). Rating agencies have kept Kroger at investment-grade, citing its consistent EBITDA and market leadership. However, Kroger’s appetite for share repurchases – it has spent billions on buybacks in recent years – and one-time payouts has raised questions about whether it might overstretch financially to satisfy shareholders. The collapse of the Albertsons merger put an end to plans for Kroger to take on additional debt for that acquisition (which, had it proceeded, would have temporarily pushed leverage higher until synergies were realized). Now, freed from that, Kroger has re-focused on deleveraging and cost discipline. In 2025, management emphasized using excess cash to reduce indebtedness and “chase growth in a financially prudent way”, a message certainly meant to reassure bondholders.

The Road Ahead: Pressure and Promise

Standing at the intersection of America’s supermarket aisles and its digital doorsteps, Kroger encapsulates the tumult facing the grocery industry. The company’s moves over the last decade – its big acquisitions, its tech bets, its dashed merger hopes – all speak to a core narrative: survival through transformation. As 2026 begins, Kroger finds itself a little leaner, a little more humbled, but still in the fight. The year 2025 saw Kroger and Albertsons both retreat to fundamentals after their “megamerger” moonshot failed. Both companies undertook what Grocery Dive described as “a relentless focus on cost savings” in the aftermath. Kroger, for one, outlined plans to shutter underperforming stores and trim its capital expenditures, even as it rolled out pocketbook-friendly initiatives (like expanded fuel rewards and price freezes on staple items) to hold on to inflation-weary customers. Yet even amid belt-tightening, Kroger hasn’t stopped innovating: late in 2025 it unveiled a pilot “deli of the future” concept in Ohio, featuring an open kitchen and restaurant-quality meals to-go. It’s a reminder that grocery retail is an ever-evolving game of anticipating consumer tastes – and that Kroger still intends to set the pace where it can.

The competitive pressures Kroger faces will only intensify. Walmart shows no sign of ceding its dominance – if anything, it’s pushing further into high-frequency grocery shopping (including piloting drone deliveries for the ultimate convenience). Amazon, after some missteps in physical grocery stores, is doubling down on ultrafast delivery and integrating groceries more tightly into its Prime ecosystem. And regional grocers continue to excel on their home turfs; Texas-based H-E-B, for example, is nearly untouchable in its state, blending low prices with deep community connection. In this context, Kroger’s scale is both a sword and a shield. Its massive store base and supply chain give it bargaining power with suppliers and the ability to operate efficiently, but its sheer size makes growth hard to come by – gaining one point of market share could require opening hundreds of new stores or capturing millions of new online customers in a mature market. For now, Kroger’s market share in its core supermarket segment is actually edging down as nimble competitors nibble at the edges. The company is candid about this reality; it argued to regulators that merging with Albertsons was the best way to counteract “powerful, non-union competitors” (a clear reference to Walmart and others) who threaten to out-invest and underprice them.

With the merger off the table, Kroger’s task is to leverage what it does have in its arsenal: a trusted brand built over a century, millions of loyal weekly customers, rich data insights, and a growing multi-channel presence. Institutional investors and analysts generally view Kroger as a stable, cash-generative business – a kind of defensive stalwart – but one that may lack the heady growth narrative of a tech-forward rival. The onus is on Kroger to prove that its digital strategy can translate not just to top-line growth but bottom-line rewards, and that its store fleet can remain relevant in an age of Instacart and same-day delivery. The pieces are there. Kroger has shown that when customers shop both online and in-store, their spending and retention soar. The company’s challenge is to continue integrating those experiences seamlessly and cost-effectively, essentially making the case that a grocery incumbent can also be a digital innovator.

There are reasons for cautious optimism. Kroger’s management, now under interim leadership, is clearly laser-focused on execution. “After shooting for the moon with their mega merger, 2025 was a year focused on efficiency and execution,” wrote industry watcher Jeff Wells, adding that both Kroger and Albertsons demonstrated they “haven’t forgotten how to innovate” even as they tighten their belts. The coming year will likely see Kroger double down on what works – expanding its Boost membership program for delivery perks, refining its store formats (perhaps smaller urban concepts to win new markets), and continuing to invest in technology that enhances the shopper experience (be it smart shopping apps or automated replenishment systems). Regulators will keep a close eye on the grocery sector, especially on pricing practices amid ongoing food inflation, so Kroger will also need to navigate public and political expectations. The company got unwelcome attention in 2022 when some accused grocers of “greedflation,” though Kroger defended its pricing as competitive and its margins indeed show it was not profiting excessively from inflation. Still, maintaining goodwill with customers – by visibly offering value – is part of competing effectively.

Kroger’s long history is marked by periods of upheaval and adaptation. It pioneered supermarket scanning in the 1970s, survived the onslaught of Walmart in the ’90s by becoming more efficient, and now it’s reinventing itself yet again for the digital age. As one era (the McMullen era) ends and another begins, Kroger stands at a crossroads: the core grocery business must fund the future, and the future must justify the investment. The company’s narrative today could indeed read like a New York Times business feature: a quintessential American retailer trying to reinvent its core operations while fending off tech titans and retail Goliaths, all in service of getting dinner on the table for millions of families. It’s an ongoing story of scale and innovation, of margins and market share, of old strengths and new frontiers. And for Kroger, the final outcome is far from written – but one thing is clear: the fight for America’s fridge has never been fiercer, and Kroger has no intention of being counted out just yet.

January 28, 2026, by a collective of authors at MMCG Invest, LLC, USDA (United States Departure of Agriculture) compliant Feasibility Study Consultants

Sources:

• TheStreet – Jan. 26, 2026 – Amazon Targets Walmart in $883 Billion Battle by Todd Campbell. (TheStreet via Yahoo Finance). (Cites Numerator data on grocery market share: Walmart ~21.2%, Kroger ~8.9% in 2025).

• IBISWorld (2025) – Online Grocery Sales in the US – Industry Competitor Matrix (The Kroger Co.). IBISWorld Company Benchmarking Data. (Kroger accounts for ~7.9% of U.S. online grocery sales in 2025, behind Walmart and Amazon).

Financial Performance (2020–2025)

• The Kroger Co. – 2024 Annual Report (Form 10-K) – Mar. 2025. SEC Filing (via Kroger Investor Relations). (Covers FY2020–FY2024 financial results; provides comprehensive financial statements and 5-year summary).

• Reuters – Mar. 6, 2025 – Kroger Forecasts Upbeat Annual Sales, Expects Some Tariff Impact by Savyata Mishra. Reuters News. (Notes Kroger’s 2024 sales outlook beat estimates and quotes CFRA analyst on improved performance amid uncertainties).

Executive Insights and Leadership Commentary

• Motley Fool – Mar. 6, 2025 – Kroger (KR) Q4 2024 Earnings Call Transcript. The Motley Fool Transcribing. (CEO Rodney McMullen’s interim successor Ronald Sargent and CFO Todd Foley discuss Kroger’s strong 2024 results, “position of strength” going into 2025, and strategic priorities on the earnings call).

• Grocery Dive – Sept. 8, 2023 – Kroger sees Q2 earnings slip with $1.4B opioid settlement charge by Sam Silverstein. Grocery Dive. (Highlights CFO Gary Millerchip’s comments that Kroger was on track for its 6th consecutive year of ~$1B in cost savings, reflecting ongoing efficiency programs).

• CBS News – Sept. 5, 2024 – Kroger CEO Defends Potential Albertsons Merger in Federal Court Testimony: “We Will Begin Lowering Prices” (CBS/AP). CBS News. (Coverage of CEO Rodney McMullen’s testimony that the day the Albertsons merger closes “we will begin lowering prices,” arguing the deal would help compete with Walmart/Amazon).

Analyst Commentary and Perspectives

• Grocery Dive – Apr. 1, 2025 – Kroger’s Road Ahead Runs Through Its Past, Analysts Say by Sam Silverstein. Grocery Dive (Deep Dive). (Industry analysts critique Kroger’s strategy: R5 Capital’s Scott Mushkin says “the golden age of Kroger was before Rodney took over,” implying recent performance has lagged; RetailStat’s Michael Infranco calls for clearer strategic vision. Analysts note Kroger’s core grocery business has suffered amid focus on alternative profits and online investments.)

• Reuters – Mar. 6, 2025 – Kroger Forecasts Upbeat Annual Sales… by Savyata Mishra. Reuters. (CFRA analyst Arun Sundaram is quoted saying Kroger’s guidance “was strong… given heightened uncertainties and the recent management shakeup,” reflecting guarded optimism. Notes Kroger’s sales resilience due to steady grocery demand and pharmacy strength.)

• Grocery Dive – Dec. 12, 2024 – Kroger and Albertsons Look Ahead After Merger Deal Collapses by Sam Silverstein. Grocery Dive. (Details Wall Street reactions after the merger termination. Kroger and Albertsons each announced share buybacks and growth plans; McMullen emphasized Kroger’s commitment to lowering prices and investing in employees even without the merger. Analysts viewed Kroger as financially solid but facing intense competitive pressure post-deal.)

Merger with Albertsons (2022–2025)

• Supermarket News – Sept. 19, 2023 – Kroger’s Rodney McMullen Sheds Light on Albertsons Merger at Groceryshop by Russell Redman (Winsight Grocery Business). Supermarket News. (Coverage of McMullen’s interview at Groceryshop: he expressed confidence in the ~$24.6B Albertsons deal, stating “I can’t wait to see when we get to one company”. Described careful plans to divest 400+ stores to C&S Wholesale to satisfy antitrust concerns, learning from the 2015 Haggen divestiture fiasco.)

• CBS News – Sept. 5, 2024 – Kroger CEO Defends… Albertsons Merger in Court (CBS/AP). CBS News. (Reports from the federal court hearing on the FTC’s injunction: CEO McMullen argued the merged company would lower prices – claiming Albertsons’ prices were ~10–12% higher than Kroger’s – and together they’d hold ~13% U.S. grocery share vs. Walmart’s 22%. Includes McMullen’s quote: “The day that we merge is the day that we will begin lowering prices.”.)

• Grocery Dive – Dec. 10–12, 2024 – Federal Court Blocks Kroger’s Bid & Merger Deal Collapses (C. Moran & S. Silverstein). Grocery Dive. (In Dec. 2024, U.S. regulators effectively blocked the Kroger–Albertsons merger on antitrust grounds. Kroger then terminated the deal, avoiding a $600M breakup fee. Kroger announced a $7.5B share repurchase and reiterated its pre-merger pledge to invest $1B in lower prices and wages to “continue to do” what drives customer loyalty. Albertsons likewise touted its strong financial position post-deal. The collapse sparked lawsuits between the companies over who caused the deal’s demise.)

Online Grocery Strategy and Digital Initiatives

• Food Business News – Dec. 5, 2025 – Kroger Becomes Keener on Brick-and-Mortar by Russell Redman. Food Business News. (Summarizes Kroger’s shift to a “hybrid” omnichannel model. CEO Ron Sargent outlined plans to accelerate new store openings for market share and leverage stores for online order fulfillment. Kroger aims to achieve profitable online grocery operations by 2026, after streamlining e-commerce – including closing some automated warehouses – which is expected to boost e-com operating profit by ~$400M. In Q3 2025, digital sales still rose 17% as Kroger expanded pickup and third-party delivery partnerships.)

• Kroger Co. Press Release – Nov. 18, 2025 – Kroger Evolves eCommerce Offerings to Improve Customer Experience, Drive Profitable Sales Growth. PR Newswire. (Announces a strategic pivot in Kroger’s online model: closing 3 Ocado “Customer Fulfillment Center” warehouses that “did not meet expectations,” while expanding Instacart, DoorDash, and Uber Eats partnerships for faster delivery. Kroger cites five consecutive quarters of double-digit e-commerce growth and will invest the ~$400M in expected savings (from the network changes) into lower prices and store improvements. Quote from CEO Ron Sargent: “eCommerce remains a core part of serving customers…We are taking decisive action…we expect to deliver profitable sales growth as a result.”)

• DigitalCommerce360 – Dec. 10, 2025 – Kroger Digital Sales Lead Q3 Growth Amid Fulfillment Changes by Abbas Haleem. Digital Commerce 360. (Details Kroger’s Q3 2025 results: identical sales +2.6%, e-commerce sales +17%. Explains Kroger’s new “combined store + delivery” strategy – using stores for more online order fulfillment while limiting expansion of centralized robotic warehouses. Notes the $2.6B impairment charge for CFC closures hit profits, but management expects the new approach to make online grocery profitable by 2026, aligning with statements that Kroger’s e-com business will become “profitable in 2026” through these changes.)

Ocado Partnership and Fulfillment Center Plans

• Supermarket News – June 8, 2020 – Kroger Plans Three More Ocado Automated Warehouses by Russell Redman. Supermarket News. (Early in the Kroger–Ocado venture: Kroger announced plans to build 3 new high-tech Ocado-powered Customer Fulfillment Centers (CFCs) (150k–300k sq ft) in the Great Lakes, Pacific NW, and West regions, on top of 6 already slated (the first opened in Ohio in 2021). Kroger and UK-based Ocado aimed to open 20 CFC “sheds” across the US in the coming years, bringing robotic grocery fulfillment and delivery capabilities to new markets. Kroger’s SVP Robert Clark touted the partnership as “engineering a model…to redefine the customer experience” with advanced robotics.)

• Grocery Dive – Sept. 11, 2023 – Kroger Taps the Brakes on Automated Fulfillment Center Rollout by Sam Silverstein. Grocery Dive. (Reveals that by late 2023 Kroger paused new CFC development to assess performance of existing sites. Earlier that year Kroger closed several smaller “spoke” facilities that feed CFCs, as they “did not meet…benchmarks for success.” This signaled challenges in scaling the Ocado model.)

• Grocery Dive – Nov. 19, 2025 – Kroger Acknowledges that Its Bet on Robotics Went Too Far by Sam Silverstein. Grocery Dive. (Detailed post-mortem on Kroger’s Ocado strategy. In Nov. 2025 Kroger announced it will shutter 3 of its 8 giant robotic CFC warehouses – a sharp reversal after years of touted expansion. Interim CEO Ron Sargent admitted on an earnings call that automation wasn’t delivering hoped-for profits, and Kroger would refocus on using its 2,700 stores for online orders. The closures led to a $2.6B write-down but are expected to improve e-commerce operating profit by $400M as Kroger leans on “asset-light” options. Analysts noted the Ocado centers, often located far from cities, struggled with too-low order density and couldn’t compete with faster delivery models (Instacart, etc.) that Americans prefer. Ocado’s U.S. exclusivity with Kroger also ended, underscoring the partnership’s setbacks.)

Cost Reduction and Efficiency Programs

• Grocery Dive – Sept. 8, 2023 – Kroger Q2 2023: Earnings Slip with Opioid Charge by Sam Silverstein. Grocery Dive. (Highlights Kroger’s ongoing cost-savings initiatives. CFO Gary Millerchip noted Q2 results benefited from “strong gross margin management [and] tight cost controls”. He affirmed Kroger was on track for its sixth consecutive year of $1+ billion in cost savings – a streak from 2018 through 2023 – achieved by productivity improvements, sourcing benefits, and technology (e.g. shelf-ready packaging, optimized workforce scheduling). These savings have been reinvested in pricing and wages (part of the **“Restock Kroger” program and successors), helping Kroger weather thin margins in a low-margin industry.)

• Bloomberg News / Yahoo Finance – June 16, 2023 – Kroger’s Plan to Cut $1 Billion in Costs – Without Layoffsby Leslie Patton. Bloomberg (via Yahoo). (Describes Kroger’s efficiency drives as of mid-2023. Executives outlined plans to trim $1B in expenses that year without mass layoffs, focusing instead on reducing waste, improving supply chain and shrink (theft) prevention, and optimizing store labor through tech. CEO McMullen emphasized “process change and goods-not-for-resale” savings – essentially cutting administrative and procurement costs – rather than cutting frontline staff. This followed five years of ~$1B annual cost cuts under Restock Kroger. Analysts from R5 Capital and others were cautiously optimistic but watching if such savings could flow to the bottom line given pressure to keep prices low.)