Kroger's new chief executive, Greg Foran, has unveiled his first major investor plan, and it centers on a familiar grocery formula: cut costs, lean into fresh food, and make online shopping work harder. The company is aiming for roughly 3% growth in core comparable sales by 2029, a target that suggests Kroger expects to win back shoppers from bigger, more aggressive rivals in a cautious consumer environment.
What's in the plan
Foran, who took the top job in 2024, is betting that Kroger can stand out by focusing on what grocers do best: fresh produce, prepared meals, and private-label products. The plan also leans heavily on the company's membership program, which rewards loyal customers with discounts and fuel points, to keep them coming back.
To protect profits even if grocery sales stay sluggish, Kroger says it will source more products directly from suppliers and use artificial intelligence to strip out duplicative work. Foran has previously told employees the company plans to cut about a third of its corporate roles over the next three years, a move that would reduce overhead but also signals the pressure grocers face to keep prices competitive.
E-commerce is another pillar. Kroger has invested heavily in online ordering and delivery, and the plan calls for more growth from that channel. That means better integration between its physical stores and digital operations, so shoppers can order online and pick up in-store or get items delivered quickly.
Why Kroger needs a new approach
Grocery retailing has become brutally competitive. Walmart and Amazon have expanded their grocery offerings, while discount chains like Aldi and Lidl have been gaining ground with low prices. At the same time, shoppers have become more selective, trading down to cheaper items or buying less overall as inflation has squeezed household budgets.
Kroger's answer is to differentiate on freshness and convenience rather than just price. Fresh food is a category where grocers can still command a premium, and prepared meals tap into the growing demand for quick, easy dinners. Private-label products, meanwhile, offer higher margins and give Kroger more control over pricing.
The company's membership program is also key. By collecting data on what shoppers buy, Kroger can tailor promotions and personalize offers, which helps build loyalty and encourages larger baskets. That data also feeds into its retail media business, where brands pay to advertise to Kroger's customers—a fast-growing, high-margin revenue stream.
What it means for investors
For investors, the plan is a signal that Kroger is serious about improving efficiency and growing beyond just selling groceries. The 3% core comparable sales growth target is modest but realistic, especially in a market where many grocers are struggling to grow at all. If Kroger can hit that number while cutting costs, it could translate into stronger profits and a healthier balance sheet.
But there are risks. The reliance on AI and cost cuts could alienate employees or lead to service hiccups, and the grocery market remains fiercely competitive. The plan also depends on consumers continuing to spend on fresh and prepared foods, which may not hold up if the economy weakens.
Investors will be watching Kroger's quarterly results to see if the strategy is gaining traction. Key metrics to track include comparable sales growth, e-commerce sales, and the performance of the retail media business. Any signs that the cost cuts are hurting store operations or that fresh food sales are slowing could weigh on the stock.
Kroger's plan comes at a time when investor sentiment is fragile, and tech stocks are dominating headlines. But for everyday investors, the grocery sector offers a more defensive play, and Kroger's focus on efficiency and customer loyalty could make it a steadier bet.
Ultimately, the success of Foran's plan will hinge on execution. Grocery retailing is a low-margin business, and small missteps can be costly. But if Kroger can deliver on its promises, it could regain the share it has lost and reward patient shareholders.
