Despite moving forward with the closure of dozens of stores, Kroger is hitting the gas on new developments heading into 2026.
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The Cincinnati-based grocer expects to boost its new store openings by 30% next year after delivering an estimated 30 new supermarkets before the end of 2025, Kroger CEO and Chairman Ronald Sargent said Thursday on the company's quarterly earnings call.
The growth projection is a departure from Kroger’s last earnings report, when the company announced plans to close 60 underperforming stores out of its 2,700 locations over the next 18 months.
By last month, Kroger had filed notices that it planned to lay off employees at 39 locations in Washington, Chicago and Milwaukee and had already closed 18 locations, Grocery Dive reported.
The company reported net earnings in the second quarter of $609M, up by 30.7% from a year ago, even as overall sales maintained the same total as a year ago at $33.9B.
The increase led the company to revise its earnings guidance upward to a range of $4.70 to $4.80 per share and its annual operating profit expectations up from between $4.7B-$4.9B to $4.8B-$4.9B.
Kroger’s plans for new stores are based on a 16% increase in e-commerce sales as consumer demand for convenience — and a willingness to pay for it — swells.
“When we use our stores to fulfill online orders, the inventory is closer to customers, and the last-mile delivery costs are lower,” Sargent said. “As demand for convenience grows, we can leverage our store footprint to reach new customer segments and expand rapid delivery capabilities without significant capital investments.”
Kroger plans to analyze its e-commerce fulfillment centers’ performance and provide an update in its next quarterly earnings call. Sites in lower-density areas perform worse than sites in high-density areas, Sargent said.
The company is also still watching its e-commerce sales to ensure profitability and said that its pharmacy offerings continue to pressure its margins. Executives are also concerned that consumer uncertainty, tariff impacts and low fuel sales could hurt Kroger as the year continues.
The grocer’s swift recovery from Q1 follows a failed $25B merger with competitor chain Albertsons. The merger was blocked by a judge in December 2024 after the firms had spent two years trying to structure a deal that would satisfy the Federal Trade Commission’s antitrust concerns.
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