Kroger (NYSE:KR | KR Price Prediction) is spending heavily to win over a cautious grocery shopper. Reuters reported that Kroger will invest $5 billion by 2029 as its new CEO focuses the company’s grocery focus. Chief Executive Greg Foran told CNBC how he reads the people pushing carts through his stores: “The customer out there at the moment is resilient, but probably more intentional. And, you know, they’re really focused on where every dollar goes.”
He described the same pattern on the September earnings call, saying “Customers are buying more on need,” with traffic up slightly and ticket down.
Scale Gives Kroger Room to Cut Prices
Foran took over as CEO in February 2026, and he finds plenty to build on: “We’ve got a fantastic brand, 143 years old. We’ve got great scale, 2,700 stores. If we can really run great stores, if we can build our digital capability, if we can modernize parts of the business and then get really affordable for customers, then I think we’ve got a fantastic business.” CNBC noted that Kroger has about 400,000 front-line associates.
The urgency is visible in the numbers. In the second-quarter results filed with the SEC, adjusted EPS of $1.09 beat estimates. Identical sales without fuel, however, rose just 0.2%, compared with 3.4% a year ago. Kroger also cut its full-year outlook for that measure to 0.2% to 0.8% from 1.0% to 2.0%.
Cost Savings Will Pay for Lower Prices
Foran says savings will pay for the cuts: “We’re actually all about giving our customers value and that’s what we’re focusing on. So we’ve identified some areas where we can save some costs. We can buy better. We can look at doing some importing directly. We can save on some of the things that we don’t sell in the store. We can modernize parts of the business, take those savings, invest them into lower prices overall for our customers.”
The CNBC segment noted that the plan includes some corporate headcount reductions. The Cincinnati Enquirer reported that executives said Kroger will build 110 new stores by 2029, and FoodNavigator reported that the company is counting on lower prices and simpler deals to drive growth.
Inflation Is Creeping Back Into the Aisles
“We’re starting to see a little bit of inflation starting to kick through,” Foran said, pointing to fertilizers and diesel. “Those sorts of things are making their way through. But actually we’re controlling that.” He added: “Our job is to actually be the agent of the customer. And so we’ll push back unless it’s appropriate that we take the price increase, and we will endeavor to keep our prices as affordable as we can for our customers.”
Online Orders, GLP-1s and Smaller Households Are Changing the Cart
Foran told CNBC that e-commerce now makes up 10% to 15% of Kroger’s grocery revenue and that it could reach 25% to 30%. Adjusted eCommerce sales grew 20% last quarter.
He also cited estimates that about 1 in 10 customers now use GLP-1 drugs, a class of diabetes and weight-loss medicines that tend to curb appetite. He said that number could rise another 50%. Households are contracting too: Foran said single-person households have grown from 17% to 30% over the past 40 to 50 years.
Kroger Stock Edges Higher as Investors Weigh the Margin Math
TradingView reported that Kroger shares inched higher after the plan was announced. As of 11:45 AM ET on Oct. 21, the stock traded at $63.76, up 1.24% on the session, 4.97% over the past week and 3.8% year to date.
Investors will be looking for two things. First, whether lower prices bring in more shoppers and bigger baskets. Second, whether savings can offset pressure on margins. Gross margin was 22.4% last quarter, and the full-year adjusted EPS guidance of $5.10 to $5.30 is what the plan will be measured against. More details are available on Kroger’s investor relations site.
What Shoppers Could See at the Checkout
Kroger’s approach points toward lower everyday shelf prices and simpler deals. On the September call, Foran said Kroger’s research showed “some of our customers understand our promotional package, but well over half do not.” He also said the price cuts will roll out market by market over several years, so changes may show up at different times depending on where you shop.
Foran expects the most careful shopper in years to reward the store that makes value easy to see. How Kroger’s sales trend in the coming quarters will show whether he is right.