The Kroger Co (KR) Investor update summary

Strategy and priorities

• Three pillars: win with customers, grow profitable digital sales and modernize operations, with execution and customer focus at the center.

• Priorities address inconsistent store execution, operating costs rising faster than sales, complex promotions and capital investments below expected returns.

• Plan emphasizes sharper everyday prices, simpler promotions, better fresh and meal offerings, consistent stores and disciplined investment in high-return markets.

• Strengths include ~2,700 stores in 35 states, an $18B e-commerce business, a $40B Our Brands portfolio and ~95% of sales tied to loyalty customers.

Customer, stores and merchandising

• Self-funded $5B customer-value investment expected by 2029, funded through savings and fewer promotions; price changes roll out by market, reaching ~250 stores by end-2026 and ~700 by end-2027.

• Stores with a year of value-plan investment delivered sales growth 230 bps above enterprise, with dollar- and unit-share gains.

• ~110 new food-first stores planned by 2029, in 50,000-, 75,000- and 99,000-sq.-ft. formats; expected to generate ~$7B in annualized sales at maturity with 6%–7% four-wall EBITDA margins.

• Our Brands penetration target rises from 35% to 40%, with 1,000 new items planned; Private Selection is expected to grow >15% annually through 2029 and exceed $5B within three years.

• Loyalty enhancements include flexible points, a new credit card and Boost; the program reaches >65M households.

Digital and retail media

• Long-term e-commerce potential is 30% of sales; priorities include a simpler online journey, faster fulfillment, meal options and personalized shopping supported by AI.

• In Q2, 60% of store-based delivery orders arrived in under two hours, including 23% in under one hour; express delivery grew >50% YoY.

• Shopping Assistant is available across all banners; repeat users spend 11% more, driven by more frequent trips.

• E-commerce is expected to add $500M of EBITDA by 2029, excluding media; retail media growth draws on first-party data, 2B+ annual transactions, 40M+ monthly site visitors and 2,700 stores.