Kroger announces closure of 60 stores nationwide
Supermarket chain Kroger will close 60 stores across the United States within the next 18 months. The announcement came during the company’s first-quarter earnings release on Friday, June 20.
The closures will affect approximately 2% of Kroger’s 2,731 locations across 35 states. The company recorded a $100 million impairment charge related to these planned closures.
Kroger did not specify which store locations would close but confirmed the closures are spread across various states.
Figure 1: Supermarket chain Kroger will close 60 stores across the United States within the next 18 months
Company outlines reasons behind store shutdowns
Interim CEO Ron Sargent said the impacted stores are unprofitable and scattered across multiple markets. He told analysts the closures will involve “ones and twos” across different regions.
Sargent said the company aims to run more efficiently and improve long-term business stability. A Kroger spokesperson confirmed the McKinney store in North Texas is among the affected locations.
“Unfortunately, we have made the difficult decision to close our McKinney store located at 1707 W. University Dr.,” Kroger stated. “This closure is part of a larger company-wide decision to run more efficiently and ensure the long-term health of our business.”
Kroger plans to reinvest savings into stores
Kroger expects a modest financial benefit from these store closures. The company pledged to reinvest those savings into customer experience improvements.
It also committed to offering roles in other stores to all affected associates. Sargent said the company remains focused on maintaining a consistent retail presence.
Kroger also confirmed the closures will not impact its full-year financial guidance.
Capital spending remains a key priority for Kroger
Despite store closures, It will proceed with more than 30 major store development projects by year-end. These include several new stores in the Marketplace format.
This reaffirmed its plan to spend between $3.6 billion and $3.8 billion on capital investments this year.
Earlier this year, it allocated $130 million for developments in Greater Cincinnati and Dayton. This includes new stores in Northern Kentucky, where competitor Publix is entering the market.
Sales improve despite closure announcement
It posted a first-quarter profit of $866 million on $45.1 billion in revenue for the period ending 24 May.
Profit fell by 8.6% while total sales declined by less than 1% from the same quarter last year. However, increased its full-year sales forecast.
Identical store sales excluding fuel are now expected to grow between 2.25% and 3.25%. This is higher than the previous estimate of 2% to 3%.
The company reported a 3.7% increase in quarterly sales year over year, despite announcing widespread closures.
Kroger faces leadership changes amid restructuring
It is currently searching for a new permanent CEO. Rodney McMullen resigned on 3 March after an internal ethics investigation.
Ron Sargent, a It board member and former Staples CEO, now leads the company as interim CEO.
Sargent confirmed that a search firm is assisting the board in selecting a new chief executive.
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Layoffs follow failed merger with Albertsons
The planned closures follow two earlier rounds of layoffs involving non-store workers this year. It has not disclosed the number of employees affected in those layoffs.
The restructuring comes months after the collapse of Its’s proposed merger with rival grocer Albertsons.
The merger would have been the largest supermarket merger in United States history. However, it failed to secure regulatory approval and was terminated in December.
Following the collapse, Albertsons filed a lawsuit accusing its of not doing enough to gain approval for the deal.
Local competition heats up in North Texas
It’s McKinney store closure aligns with broader competition in Collin County, Texas.
Tom Thumb, another grocery chain, plans to shut stores in Plano and Allen this summer.
It’s decision reflects a strategy to prioritise high-performing locations and reinvest in strong growth markets.
Kroger continues to employ thousands across the country
The company employs 409,000 workers nationwide. In Greater Cincinnati and Northern Kentucky alone, it operates 76 stores with 14,500 associates.
The closures represent a small portion of Kroger’s overall footprint, with continued focus on market-specific investments and expansion.
The company’s national presence and future development efforts remain core to its long-term plans.
its appears to be restructuring while boosting investment in select markets and store formats.
