Major grocery chain to shutter more than 60 locations by end of 2026
Kroger has announced plans to close more than 60 underperforming stores across the US by the end of 2026, marking one of the largest closure rounds in the company's recent history.
The news came during Kroger's first-quarter earnings report, released on June 20, which states that the closures are expected to result in a 'modest financial benefit.'
'In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closing of approximately 60 stores over the next 18 months. As a result of these store closures, Kroger expects a modest financial benefit,' the report states.
Kroger also emphasized its intention to reinvest savings from the closures into improving the customer experience.
'Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance,' the report reads.
Despite the scale of the closures, the company said no layoffs are expected. Employees at affected locations will be offered positions at nearby stores or in other areas of the business.
'Kroger will offer roles in other stores to all associates currently employed at affected stores,' the report states.
The closings come after interim CEO Ron Sargent (pictured) took over after Rodney McMullen abruptly resigned on March 3 amid an internal ethics investigation
Kroger, which operates nearly 2,800 stores nationwide under banners such as Ralphs, Fred Meyer, King Soopers, and Harris Teeter, has not yet released a list of affected locations.
In the same report, Kroger disclosed that its Q1 2025 net income fell to $866 million, down from $962 million a year earlier. Total sales also declined slightly to $45.1 billion from $45.3 billion.
Still, the company raised its full-year forecast for same-store sales (excluding fuel) to between 2.25 percent and 3.25 percent, citing strong demand for fresh foods, store brands and digital services.
'Our strong sales results and positive momentum give us confidence to raise our identical sales without fuel guidance, to a new range of 2.25 percent to 3.25 percent,' CFO David Kennerley commented in the report.
'While first quarter sales and profitability exceeded our expectations, the macroeconomic environment remains uncertain and as a result other elements of our guidance remain unchanged,' he added.
Kroger also reaffirmed plans to spend between $3.6 billion and $3.8 billion this year on capital projects, including new store construction and renovations.
The company aims to open around 30 new stores by the end of 2025, focusing on markets with stronger performance and growth potential.
More details on the closures, including specific locations and timelines, are expected in the coming months.
The closings come after interim CEO Ron Sargent took over after Rodney McMullen abruptly resigned on March 3 amid an internal ethics investigation.
The grocer is currently undergoing a national search for a new CEO.
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