Kroger’s new growth plan combines 110 new stores, expanded private brands and $4 billion in annualized savings as the grocer seeks to improve sales and modernize operations.
Kroger is targeting approximately 3% comparable-store sales growth by 2029 as it launches a multiyear strategy built around lower prices, store expansion, private-brand growth and operational savings. The plan includes a $5 billion investment in customer value and a goal of generating $4 billion in annualized cost savings to help fund growth.
CEO Greg Foran outlined the strategy at the company’s Oct. 20 investor update, positioning it as a reset focused on improving store execution, growing digital sales and directing resources toward initiatives with stronger returns. Kroger also plans to open approximately 110 stores by 2029 and reduce corporate complexity, including eliminating 3,000 corporate roles over three years.
The strategy follows a second quarter in which sales momentum weakened, underscoring the challenge facing the Cincinnati-based retailer as it seeks to turn cost savings and customer investments into sustained growth.
Kroger’s Q2 2026 Results Show Uneven Momentum
For the second quarter ended Aug. 15, Kroger reported $34.6 billion in net sales, excluding fuel, the sale of Vitacost and the exit of certain fulfillment centers. Identical sales without fuel increased 0.2%, compared with 3.4% in the year-ago quarter.
Adjusted earnings per share rose 5% to $1.09, while adjusted FIFO operating profit declined to $1.076 billion from $1.091 billion a year earlier. Adjusted e-commerce sales grew 20%, and Kroger Precision Marketing profit increased 24%.
Kroger reaffirmed its full-year adjusted EPS guidance of $5.10 to $5.30 but lowered its forecast for identical sales growth without fuel to 0.2% to 0.8%, down from its previous range of 1% to 2%. The results reflect a retailer continuing to invest in customer value while managing operating costs and pursuing stronger sales growth. (Kroger Q2 results)
$5 Billion for Customer Value, $4 Billion in Savings
Kroger’s strategy rests on three priorities: winning with customers, driving profitable digital growth and modernizing operations.
The company plans to make everyday value more visible, simplify promotions and invest in fresh foods and meal solutions. It expects to fund the $5 billion customer-value investment through operational savings and changes to purchasing and promotional practices, rather than relying on external funding.
Kroger’s $4 billion annualized savings target centers on more direct sourcing, disciplined purchasing, reduced indirect spending and a more standardized operating model. Direct sourcing currently represents less than 1% of its sourcing, and Kroger wants to increase that share to more than 10%.
The company is also expanding its Kroger Capability Center to consolidate repeatable support functions and use technology, automation and artificial intelligence to improve productivity. Kroger says the corporate workforce reductions are part of this effort to simplify operations and eliminate duplicate work. (Supermarket News)
New Stores and Private Brands Drive Growth Plans
Kroger plans to open approximately 110 stores in markets where it expects attractive returns. Three refreshed store formats will emphasize fresh departments, prepared meals and private brands, while providing more space for e-commerce fulfillment where needed.
The company expects the new stores to generate approximately $7 billion in annualized incremental sales at maturity, according to Grocery Dive. The expansion represents a renewed emphasis on physical growth after Foran acknowledged that Kroger had not built enough stores during a period when competitors were expanding. (Grocery Dive)
Private brands are another central component. Kroger expects its premium Private Selection brand to exceed $5 billion in sales, with growth projected at more than 15% annually through 2029. It also plans to introduce 1,000 additional Smart Way items over three years, strengthening its opening-price-point assortment.
These initiatives aim to improve value perception while giving Kroger more control over its assortment and differentiation.
Digital Growth and Execution Remain Critical
Kroger is targeting growth in e-commerce and retail media, including its Kroger Precision Marketing business. Store investments will include digital shelf labels, robotics, inventory tools and AI intended to improve shelf accuracy, productivity and product availability.
The company’s updated long-term financial framework calls for approximately 3% comparable sales growth in 2029, excluding fuel and pharmacy, alongside annual compound growth of 3% to 6% in adjusted EBITDA and 7% to 11% in adjusted net earnings per share from fiscal 2027 through fiscal 2029. These targets exclude the pending Giant Eagle acquisition.
Kroger’s challenge is execution: translating lower costs, new stores, stronger private brands and digital investment into measurable sales growth while maintaining profitability. The next test will be whether those initiatives improve comparable sales after the slower momentum reported in the second quarter.
For suppliers and competitors, the plan signals a retailer placing greater emphasis on everyday value, purchasing discipline, private-brand differentiation and demonstrable returns on investment.