Kroger to close 60 unprofitable stores after failed merger with Albertsons
Amid plans to close 60 stores, Kroger is working to open new stores and reassign employees while navigating challenges following its planned merger with Albertsons.
scripps news
Kroger’s new CEO Greg Foran acknowledged industry speculation that the company plans to cut prices on “thousands of items” in an effort to reignite sales growth, according to news reports.
“I think of our business like a Formula 1 race. We have a front group of cars that are doing a very good job,” Foran told Bloomberg in a May 21 article. “Our aim is to break out of the midfield and start lapping faster, closing the gap with the cars in the lead group and ideally overtaking them.”
CEO wants lower prices as Kroger customers lighten their baskets
Foran said Kroger’s “basket” of customers is shrinking, in industry parlance, and are buying cheaper and fewer items amid rising gas prices, persistent inflation, the Iran war and overall economic uncertainty. He noted that Kroger’s competitors, including Walmart, Costco, Trader Joe’s, Aldi and Amazon, are winning more customers by emphasizing lower costs.
“The reality is, the basket has to go down,” Foran said. “It has to span thousands of products and it has to meet the common sense of the customer.”
Foran said Kroger will test the price cuts in the coming months and then roll them out more broadly over time. He added that Kroger will have the funds to lower prices by improving its sourcing from suppliers and using technology more efficiently.
Kroger is also considering an acquisition.
Beyond price improvements, Foran added, Kroger is open to acquisitions to expand its store operations, particularly in high-growth markets including the Northeastern United States (where it doesn’t have a presence) and parts of Texas, the Carolinas and Florida.
Foran, a former executive who led Walmart’s U.S. operations from 2014 to 2019, joined Kroger in February after the supermarket operator spent 11 months searching for a new CEO.
The new CEO’s comments came after Kroger reported flat annual sales of nearly $148 billion in March.
