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# Who Kroger Is Becoming, and What It Means for Vendor Partners
- URL: https://www.cincinnaticpgedge.com/who-kroger-is-becoming/
- Published: 2026-09-23T10:09:23.000Z
- Updated: 2026-09-23T10:09:23.000Z
- Description: Kroger has reinvented itself before, and it is doing it again with a push to become America's favorite grocer. Here is where Kroger is, where it wants to go, how it plans to get there, and the pressure that puts on every supplier.
- Author: Cincinnati CPG Edge

Kroger has a talent that does not get enough credit. Every few years, it decides who it wants to be, and then it goes and becomes that retailer.

Think back. Simple Truth launched in 2012 and grew into a multibillion-dollar brand, and Kroger positioned itself as one of the biggest sellers of natural and organic food in the country. Restock Kroger in 2017 put data, digital, and store investment at the center of the plan. 84.51 turned shopper data into a competitive weapon and eventually into a retail media business. The Ocado partnership was a big bet that automated warehouses were the future of online grocery. Some of those plays worked beautifully. Some did not. But every one of them changed what it meant to be a Kroger supplier.

Kroger is morphing again right now. The new goal, in CEO Greg Foran’s words, is to become America’s favorite grocer. That phrase is showing up on earnings calls, in press releases, and in just about every public comment coming out of the General Office. If you sell to Kroger, this is the most important strategic shift you need to understand, because the way Kroger gets there runs straight through your business.

## Why Kroger Is Changing

Retailers do not reinvent themselves when things are going great. Kroger is changing because the numbers told it to.

In the second quarter of fiscal 2026, identical sales without fuel grew just 0.2%, compared with 3.4% in the same quarter a year earlier. Kroger lowered its full-year identical sales guidance to a range of 0.2% to 0.8%, down from 1% to 2%. The stock has lost roughly a fifth of its value over the past six months.

The shopper data is even more telling. According to a recent Numerator analysis, Kroger added more than 1 million higher-income households over the past year while losing about 700,000 lower-income households. The lower-income shoppers who stayed cut their CPG spending by 5.2%. Across its shopper base, roughly $12 billion in CPG spending moved to Amazon, Walmart, and Costco, with Kroger directly losing more than $1 billion as a result.

Foran has been candid about the pressure. On the Q2 call he pointed to SNAP reductions, higher fuel prices, and softer consumer confidence squeezing household budgets. His read on the Kroger shopper was simple: *“They are not absent.”* They are still coming in, but they are buying on need and buying with discipline.

And here is the uncomfortable part. Kroger, like every traditional supermarket, is stuck in the middle of the field. It does not have Walmart’s scale, Costco’s membership economics, Amazon’s convenience, or Aldi’s stripped-down cost model. Numerator’s market share work for the 12 months ending June 30 showed Kroger, Albertsons, and Ahold Delhaize USA all losing share while Amazon, Costco, and Walmart gained. The middle is a hard place to live in grocery right now.

## Who Kroger Is Chasing

If you just read the headline about a million new higher-income households, you might think Kroger is moving upmarket. It is not. Many of those shoppers appear to be value-seekers themselves, trading in from pricier specialty and premium stores rather than being targeted by a new upscale strategy.

The shopper Kroger is working hardest to win back is the one it lost: the lower-income household that took its trips to Walmart, Costco, Amazon, and hard discounters like Aldi. Foran summed it up in a Bloomberg interview this spring: *“The reality is, the basket has to come down.”* Kroger committed to cutting prices on thousands of items, rolled out fuel savings, and relaunched its loyalty program as Points, where members can now redeem for grocery savings rather than only fuel.

But Kroger is not trying to be the cheapest store in town. On the Q2 call, Foran said the goal is to be the best value option, with the right basket gap versus competitors given Kroger’s assortment, service, and fresh quality. A Bank of America pricing study found the gap between Kroger and Walmart narrowed from about 14% in 2025 to about 10% in 2026, with the widest gaps in meat, dairy, and produce and only a 2% gap in center store.

So Kroger wants to keep the new higher-income shopper, win back the lower-income shopper, and hold the middle together while doing it. That is a retailer trying to be all things to all people. Some would call that greedy. We would call it ambitious, and very Kroger. Either way, it is expensive, and somebody has to pay for it.

## How Kroger Plans to Get There

The good news for anyone trying to understand Kroger is that leadership has been unusually clear about the playbook. Here is what they have said publicly.

**Savings fund the price.** Foran has said Kroger generates savings through cost of goods, goods not for resale, and headcount efficiency, then puts those savings into shelf prices gradually, market by market. He compared it to descending a plane 1,000 feet at a time. It is a multi-year program, not a quick fix.

**Simpler pricing, simpler promotions.** Leadership has said price perception is just as important as the price itself. Kroger plans to gradually rebalance shelf prices and promotional activity, tracking unit growth and competitor response along the way.

**Fewer SKUs, more direct sourcing.** In his first 100 days, Foran named center store SKU rationalization, direct imports, and the new Kroger Capability Center as key cost and efficiency levers. Those are not small words for a supplier to hear.

**Our Brands keep gaining.** Kroger’s private label outpaced national brands in Q2, with private label penetration up about half a point. Shoppers under pressure are voting for Kroger’s own labels, and Kroger is happy to let them.

**The store is the stage again.** After years of big digital and automation bets, the focus has swung back to the four walls. Foran says the agenda is centered on in-stocks, merchandising, store standards, and shrink. On-shelf availability hit an all-time high in Q2\. Kroger is investing in associate wages, has hired a new Chief Store Operations Officer, and plans to grow new stores by 30% in 2026, with a target of 70 to 80 new locations next year.

**A leaner, denser network.** Kroger closed several automated Ocado fulfillment centers and took a $2.6 billion charge in the process. It is closing roughly 60 underperforming stores. It agreed to acquire Giant Eagle for $1.65 billion, a deal many observers view through a supply chain lens: more procurement scale, more distribution density, and more leverage with suppliers.

**Digital and media still matter.** Adjusted eCommerce sales grew 20% in Q2 and Kroger Precision Marketing profit grew 24%. With retail media included, eCommerce has now turned a profit two quarters in a row.

## This Is Not the Same Kroger

If it feels like Kroger has changed a lot in a short time, that is because it has. Look at just the last few months.

| A Different Retailer in Under a Year • February: Greg Foran becomes Kroger’s first CEO hired from outside the company, after leading Walmart U.S. from 2014 to 2019. • March to September: Senior leaders depart, including the EVP of supply chain, two SVPs of retail divisions, the Global VP of the Kroger Capability Center, and the EVP and Chief Associate Experience Officer. • May: Kroger commits to lowering prices on thousands of items. • July: Giant Eagle acquisition announced. • August and September: Two more Walmart veterans join the executive team as Chief eCommerce Officer and Chief Store Operations Officer. • September: Q2 results come in soft and sales guidance is cut, while profit guidance holds. • October 20: Investor Day, where Kroger has said it will lay out its longer-term framework. |
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The leadership turnover deserves a moment of attention. When experienced leaders leave in a cluster and new leaders arrive from the same outside company, it usually means the plan is changing, not just the people. Add in the Kroger Capability Center, which trade press and analysts have reported could eventually take on work from corporate functions such as merchandising, marketing, supply chain, and category management, and you have an organization in real motion. Kroger has called headcount estimates tied to the center premature, so treat the specific numbers you see online with caution. But the direction is not in doubt.

## The Pressure This Puts on Vendor Partners

Here is the part that matters most for anyone reading this. Kroger runs on thin margins. It has said out loud that savings fund value. And we have said it before on this site: you need Kroger more than Kroger needs you. Put those three things together and the pressure is easy to see.

**Your cost is part of the funding plan.** When Kroger talks about savings in cost of goods, a meaningful share of that conversation happens with suppliers. Expect sharper cost conversations, more questions about promotional efficiency, and more interest in what you can contribute to lower shelf prices.

**Promo dollars may change shape.** If Kroger rebalances away from deep, complicated deals toward simpler, lower everyday prices, the way your trade dollars work may need to change too. Brands built around high-low promotional spikes should be thinking now about what an everyday value story looks like.

**The tail is at risk.** Center store SKU rationalization means slow movers, duplicate sizes, and me-too items will have a harder time holding shelf space. In your next category review, the 84.51 data will do the talking, so know your comp index, your penetration, and your repeat rate before you walk in.

**Private label is a real competitor.** Our Brands are winning with value-seeking shoppers. If your item does not bring something private label cannot, you need a sharper answer to why it deserves the space.

**Operational reliability counts more than ever.** A retailer obsessed with in-stocks and store standards has very little patience for short shipments and late deliveries. Case fill, ORAD, and clean EDI are no longer back office details. They are part of your sales pitch.

**Relationships will reset.** With leadership changing and functions potentially moving, the people you work with today may not be the people you work with next year. Document your agreements, keep your history organized, and be ready to introduce your brand again with a clear, simple story.

## How to Show Up for the New Kroger

To be successful at Kroger, you have to understand the retailer: where it is, where it wants to go, and how it plans to get there. The suppliers who do well through this chapter will be the ones speaking Kroger’s new language.

| Questions to Answer Before Your Next Kroger Meeting • How does my brand help Kroger win back a value-focused shopper without giving up the ones it just gained? • Which of my items would survive a SKU rationalization, and which ones should I be ready to defend or replace? • Is my trade spend built for a simpler, lower everyday price world, or only for deep promotional spikes? • What do I offer that Our Brands cannot? • Are my case fill, ORAD, and EDI performance something I would be proud to show a Category Manager? • If my Kroger contacts changed tomorrow, could someone new understand my business in five minutes? |
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Kroger has reinvented itself before, and it will probably do it again. The suppliers who thrived through Simple Truth, Restock Kroger, and the rise of 84.51 were the ones who figured out early where Kroger was headed and built their plans to help it get there. This chapter is no different. Kroger is telling us, pretty clearly, who it wants to become. Our job is to listen, and to show up as part of the answer.

We will be watching Investor Day on October 20 closely and will share what it means for suppliers. And as always, we will not get every read exactly right. If you are seeing something different in your categories, tell us. That is how we all get better.

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**Sources:** Kroger Q2 2026 earnings release and call (Sept. 11, 2026); Kroger Q4 2025 earnings call (March 2026); Kroger 2026 proxy statement; Kroger press releases on Mark Ibbotson and Nate Faust; Numerator shopper analysis as reported by Supermarket News, Progressive Grocer, and TheStreet; Grocery Dive; Food Dive; Bloomberg; eMarketer; Bank of America pricing research as reported by TheStreet; Supermarket News and Cincinnati Enquirer reporting on executive departures.

*From Cincinnati CPG Edge, keeping you in the Kroger know.*