How Kroger plans to become ‘America’s favorite grocer’

A week after announcing it would lay off 3,000 corporate employees over the next three years, Kroger unveiled its plan to become “America’s favorite grocer.”

The grocer has lost share with shoppers amid increasing competition from superstores and discounters, and at its investor day last week, CEO Greg Foran and other Kroger execs outlined ways it intends to gain favor with US consumers and ultimately grow its comparable sales by 3% by 2029.

Bricks and clicks: Kroger is debuting a new “Fresh” store format with a “food-first experience,” Mary Ellen Adcock, its EVP and chief merchant and marketing officer, said. This format will be seen across 110 new stores through 2029, along with remodeled locations.

These stores will come in three sizes: 99,000 square feet for high-volume areas; 75,000 square feet for a “broad range of markets”; and 50,000 square feet for areas necessitating a small footprint. They’ll establish more space for meals, private label items, and e-commerce pickup, while cutting space for general merchandise and apparel. Kroger’s Chief E-Commerce Officer Nate Faust also outlined plans for e-commerce growth, highlighting efforts like faster fulfillment and its AI shopping assistant.

Paying the price: To better cater to price-conscious consumers, Kroger will invest $5 billion on lowering prices through 2029, Adcock said.

“Today, not enough of our customers understand the value Kroger offers,” she said, calling the company’s current promotions “too complex.”

While the grocer will continue to execute promotions, she said it’ll shift more focus to lowering everyday prices—an effort funded through the simplified approach to promotions. Adcock said locations where Kroger’s lowered prices and streamlined promotions have already led to increased visits, basket sizes, and units sold.

Meat ticket: Fresh products account for 37% of shoppers’ baskets, so Kroger will focus on higher-quality fresh offerings, she said. With a goal of becoming America’s “ready-meal destination,” it’s also launching more ready-to-cook and ready-eat-meal options, with 100 new meals rolling out over the next year to further tap into the $1.4 trillion food away from home market. Kroger also aims to grow its private label sales from 35% to 40%, introducing 1,000 new items to its low-priced Smart Way brand in the next three years.

Looking ahead…Foran said he believes the grocer has “assets and the capabilities to win.”

“We do see a large identifiable market opportunity and we’ve set a bold set of financial targets and a clear path to deliver against those,” he said. “The balance from here is simple. Less time talking about the plan and more time delivering it. Now we execute.”