Grocery Wars: Kroger Shares Take Hit As Competition Heats Up

grocery store, bananas

Kroger Co. is not having the strongest week. In addition to announcing earnings that missed analyst estimates and weak same-store sales Thursday, the grocer's stocks took a dive Friday following the announcement of Amazon's acquisition of Whole Foods Market.

Kroger’s shares plummeted 19% Wednesday after reporting a 0.2% decline in Q1 same-store sales, marking the grocer’s largest one-day drop in over 17 years, the Wall Street Journal reports. The chain is the largest traditional grocery chain in the country, and CEO Rodney McMullen said it will lower prices and boost customer service, partly by increasing wages, to compete in a tightening market.

Market research firm Nielson said discount grocers and online orders are taking a growing chunk of sales away from traditional grocery stores. That pressure is not expected to subside soon, with German discount chains Aldi and Lidl both expanding deeper into U.S. markets. Lidl opened its first U.S. locations this week, and Aldi announced plans to invest $5B into its U.S. stores over the next five years to open an additional 900 locations.

Amazon is also pressuring the grocery sector. The company agreed to acquire Whole Foods for $13.7B Friday and recently launched its grocery pickup business in Seattle.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

'Illegitimate' Or 'Leveling The Playing Field'?: Why Habitability Cases Are Surging In Eviction Court

Walker & Dunlop Execs On Dealmaking Volatility, Data Center Risks, Housing

Hines Closes $591M Multifamily DST Offering

CBRE Leans On Data Center Business As Higher Rates Squeeze Capital Markets

Blackstone Writes Down Real Estate Values But Remains Bullish On Data Centers

Debt Flood Shrinks Bank OZK's Real Estate Book Faster Than Planned

The Governor Races And Referendums Where Housing Is On The Ballot

Trump: Data Centers 'Mandated' To Supply Own Electricity, Should Pay 'Dividend' To Communities

Making Data Center Construction Supply Chains Smarter

Amazon Ditches Ashburn Data Center Plan, Shifts To Mixed-Use Vision

Apollo To Buy Majority Stake In $2B UDR Portfolio

Harrison Street Launches Marina-Focused Investment Fund