Kroger: Closing 60 Stores Under ‘Core Business Focus’

In its first full quarter under new interim leadership, grocery retailer Kroger reported total sales just below the year-ago period, while gross margin and gross profit ticked up slightly.

• Identical Sales (same-store sales) excluding fuel increased 3.2%, compared to 0.5% in Q1 2024.
• Gross margin was 23%, versus 22% in the same period last year
• Adjusted EPS rose to $1.49, gaining $0.05 year-over-year

While referencing the “changing environment around tariffs,” interim CEO and chairman Ron Sargent said the “business model is flexible” and expects “a smaller business impact than some of our competitors.”

“We are proactively looking for ways to avoid raising prices for our customers, and we consider price changes as a last resort.”

Company leadership reported that store rationalization was a part of “better focusing on the core business.” While 30 major store improvement projects are slated to be completed in 2025, 60 “underperforming” stores will be closed over the next eighteen months.

“We don’t take these decisions lightly, but this will make the company more efficient,” Sargent said, referencing an effort to offer store associates opportunities in other stores.

Moving forward, Kroger is focused on opening new stores in 2026 in “high-growth geographies,” Sargent added.

As part of Kroger’s shift toward revenue efficiency, the retailer has emphasized value creation for consumers. This focus has taken shape in expanding its Our Brands private label business segment, including 80 new protein products “from bars to powders to shakes” on the Simple Truth store brand.

While the company appointed Yael Cosset as chief digital officer and Retail Divisions SVP Joe Kelly as the new president of the consolidated division consisting of King Soopers and Food 4 Less, the search for a permanent CEO is still ongoing.

Cosset is part of Kroger’s investment in boosting ecommerce sales and looking at “every single aspect” of its digital strategy and operations.

Kroger raised its Identical Sales forecast up slightly to 2.25% to 3.25% (originally 2% to 3%). All other guidance remained the same from what was announced during Q4 2024.

“While first-quarter sales and profitability exceeded our expectations, the macroeconomic environment remains uncertain,” said CFO David Kennerley. “We’ve got a really good foundation, and so I see this as operating from a position of strength.”