Retail giant Kroger has confirmed it will close 60 of its stores across the United States within the next 18 months. While the company has not shared a detailed list of impacted locations, the move is part of a wider operational shift to sharpen focus on its core business segments.
According to a recent regulatory filing, the Cincinnati-based grocer stated that these closures represent about 5% of its 1,239 Kroger-branded locations currently active across 16 states.
$100 Million Write-Down Linked to Closures
In its latest earnings report, Kroger revealed a $100 million impairment charge tied to the anticipated closure of approximately 60 stores. The company explained that it expects to gain a modest financial upside from this decision, which is intended to optimize store performance and long-term efficiency.
Affected employees are expected to receive job offers at nearby Kroger locations, minimizing workforce disruptions.
McKinney, Texas Location Among Confirmed Closures
Though a full list of store closures has not been released, one impacted site is the Kroger store at 1707 W. University Drive in McKinney, Texas, according to WAFF.
“After careful consideration, we’ve made the tough call to shut down our McKinney location,” Kroger said in a statement. “This decision is part of a broader initiative to streamline operations and strengthen the company’s future.”
Earnings Report Shows Slight Dip in Sales
The announcement of store closures came shortly after Kroger published its first-quarter earnings, which showed a small decline in revenue. Sales fell slightly to $45.1 billion, down from $45.3 billion during the same quarter a year ago.
Still, Chairman and CEO Ron Sargent painted an optimistic picture.
“Kroger had a strong first quarter, led by pharmacy, eCommerce, and fresh categories,” said Sargent. “We’re making solid strides in improving operations and enhancing the overall customer experience.”
Key Financial Highlights
Despite a marginal drop in overall revenue, Kroger saw gains in several adjusted financial indicators:
- Identical-store sales (excluding fuel): Up 3.2%
- Total sales: Increased by 3.7% to $45.12 billion, compared to $45.27 billion last year (which included revenue from the now-divested Kroger Specialty Pharmacy)
- eCommerce growth: Up 15%, although this segment remains unprofitable
- Adjusted operating profit: Reached $1.52 billion, a 1.3% increase
- Net income: Fell 8.6% to $866 million
- Earnings per diluted share: Held steady at $1.29, with adjusted EPS up to $1.49 from $1.43
Big changes are coming to one of the nation's largest supermarkets.
— KHOU 11 News Houston (@KHOU) June 20, 2025
MORE: https://t.co/P9GVaPVQ3B pic.twitter.com/YNyCy3m4h8
Margins Improve Despite Consumer Caution
Kroger’s gross margin rose to 23%, up from 22% the previous year. This gain was largely driven by the sale of Kroger Specialty Pharmacy, lower shrinkage, and reduced supply chain costs, though it was partially offset by the growth of low-margin pharmacy sales.
Consumer spending habits remain cautious. According to Sargent, customers are:
- Purchasing more private-label and promotional items
- Making smaller, more frequent trips
- Cutting back on discretionary spending like snacks and pet products
- Buying in larger quantities to maximize value
Kroger Responds to Changing Shopping Habits
In response, Kroger is expanding its Simple Truth product line with 70 new high-protein items and working to make in-store promotions easier to find and use.
The company is also restructuring its eCommerce unit under Chief Information Officer Yael Cosset. Improvements include:
- Faster pickup wait times
- Growth in online user base
- A push toward long-term profitability in online grocery operations
Cost Optimization & Leadership Changes
Newly appointed Chief Financial Officer David Kennerly is taking a fresh approach to cost reduction. His focus includes:
- Streamlining cost of goods sold
- Reining in non-resale expenditures
- Implementing process improvements, including tech-driven efficiencies
“Both Ron and I bring new perspectives to the table,” said Kennerly. “We’re identifying cost-saving opportunities across the board.”
ID Sales Projection Gets a Boost
Kroger has updated its identical-store sales (ID sales) outlook, excluding fuel, raising guidance to 2.25% to 3.25%, slightly higher than its previous range of 2% to 3%.
Key full-year guidance remains unchanged:
- Adjusted Operating Profit: $4.7 billion–$4.9 billion
- Adjusted EPS: $4.60–$4.80
Despite macroeconomic uncertainties, Kroger said it has not been significantly impacted by tariffs, thanks to its largely domestic sourcing model.
Also Read :
Bahama Breeze Shutdown? Darden Considers Selling the Caribbean-Style Chain
184 Million Passwords Leaked: Google, Microsoft, Facebook Among Biggest Victims