Kroger plans to invest $5 billion in customer value through 2029, including lower prices and simpler promotions, while expanding its ecommerce, private label and prepared meals businesses.
Company executives at the largest pure-play grocery chain in the US released the long-term outlook for the company at Kroger’s annual Investor Update event on Tuesday.
Kroger set three main targets: approximately 3% comparable sales growth in 2029, excluding fuel and pharmacy; compound annual growth of 3% to 6% in adjusted EBITDA; and compound annual growth of 7% to 11% in adjusted net earnings per share over fiscal 2027 to 2029.
Those targets exclude Kroger’s proposed $1.65 billion acquisition of the 197-store grocery chain Giant Eagle, which is expected to be completed in 2027.
“The good news is we already have what we need,” said Kroger CEO Greg Foran. “We have approximately 2,700 stores across 35 states, a roughly $18 billion ecommerce business and a $40 billion [private label] business, large-scale manufacturing and supply chain assets and around 95% of sales tied to a Kroger loyalty card.”
Kroger reboots physical stores
The investor event follows a lackluster second quarter, where identical store sales – a comparable-sales measure for physical stores, excluding gas and pharmacy, over five quarters – came in relatively flat at 0.2%.
It was a substantial year-over-year drop from the 3.4% growth from the same quarter in 2025.
Foran said on Tuesday that “the store experience has varied too much” and some have fallen below the company’s standards. Kroger was also hindered by operating costs growing faster than sales, which made it difficult to invest in price and protect margins, he added.
The grocer’s value proposition also failed to keep pace with customer demand, Foran concluded.
“The promotions became overly complicated. Customers had to work too hard to take advantage of them, and the perception of our price position weakened,” he said. “Finally, we made capital investments that did not produce the returns we expected, and we did not build enough new stores at a time when much of the industry was expanding quickly.”
Kroger plans to redirect its capital investments toward opening 110 new stores in high-return markets through 2029 and adding more space for food, prepared meals and ecommerce fulfillment.
Digital growth is key
Kroger’s most urgent and biggest opportunity is in digital growth, Foran explained.
Kroger reported more than $16 billion in ecommerce sales in fiscal 2025, equivalent to roughly 11% of its $147.6 billion in total company sales.
Executives project that statistic to nearly triple to 30% over the next five to seven years.
“Most of the growth in grocery today is happening online,” Foran said. “Customers are increasingly choosing delivery, and that’s where we have to lead.”
Kroger’s online shopping infrastructure, along with its massive brick-and-mortar footprint gives the company an edge over its competitors, Foran said.
The data business behind its ecommerce operation is also helping to strengthen company revenue. While Kroger did not disclose an exact profit figure for its retail media business, Kroger Precision Marketing (KPM), the grocer reported that the company’s profit grew more than 20% year over year in Q1 2026.
In its 2025 annual report, which ended Jan. 31, 2026, Kroger reported $1.5 billion in operating profit from its “alternative profit businesses,” which includes retail media and data analytics sales.
“Kroger Precision Marketing is a key contributor to our alternative profit strategy, which focuses on generating revenue from assets and capabilities that complement our core grocery business,” the company said in its annual report. “The retail media business carries an attractive margin profile relative to our traditional operations and is an important driver of our digital profitability.”
Price cuts coming at Kroger
Kroger’s path to returning to 3% comparable store sales relies in part on $5 billion price cuts over the next three years, the company said.
Mary Ellen Adcock, chief merchandising and marketing officer at Kroger, said shoppers will respond to lower prices and simplified promotions.
“Today, not enough of our customers understand the value Kroger offers,” she said.
Foran highlighted that Kroger shelf labels frequently display three price points for a single product. For instance, the regular price might be $3.99, while the same product will also include a $2.99 digital deal price and a $1.99 price for purchasing six or more.
Combined with mix-and-match deals and “buy two, get three free” promotions, the variety and complexity of deals was making it difficult for shoppers, Adcock explained.
“We recognize that customers need to see our value more simply, more clearly and more reliably,” she said.
Adcock noted that stores are already lowering prices on thousands of products and simplifying promotions, and customers are visiting and buying units more.
For stores that already have implemented these measures for a year, top-line sales grew 230 basis points, she explained.
Private label premium and organic growth
Kroger also plans to expand its private label brands by roughly 1,000 new products over the next three years to attract shoppers, Adcock said.
“Our [private label] portfolio is enabled by our network of 35 manufacturing plants across the United States, and this differentiated network gives us greater control over quality, speed to shelf on important items and visibility into cost,” she said.
The goal is to increase profitable store brands from 35% to 40%, she said.
Private Selection, the grocer’s premium private label portfolio, is delivering “strong momentum,” according to Adcock, adding that Kroger sees a significant runway for growth in areas like Private Selection’s global flavors lineup.
“We expect this brand to grow more than 15% annually through 2029, and we fully expect Private Selection to be an over $5 billion brand over the next three years,” she said.
Kroger also anticipates continued growth with its Simple Truth organic store brand, which has already penetrated roughly 30 million households, Adcock explained.
“Building off that strong foundation, we’re committed to investing in areas like nutrient-rich protein products, where we continue to see customer demand,” she said.
Kroger takes on quick service restaurants
Prepared meals sales at grocery stores has been growing in the US since the pandemic, but Kroger is doubling down on the challenge to quick service restaurants.
Calling prepared meals an exciting opportunity for the grocery chain, Adcock explained that Kroger will introduce more than 100 new meal options over the next year.
“The assortment may vary by store size or local preference, but the product looks great, the food is fresh and the value is clear, and importantly, these innovations extend beyond grocery share,” she said. “Every night that we win the weeknight dinner is a trip that would have gone to food away from home, which is a $1.4 trillion market, and we see tremendous upside as we only have 4% share.”
