Kroger Closes 60 Stores Nationwide to Optimize Operations and Boost Efficiency

Grocery giant Kroger has announced plans to close approximately 60 stores across the United States over the next 18 months. This decision is part of a broader strategy to optimize the company's store portfolio and improve operational efficiency. Among the closures, four stores in the metro Atlanta area will be affected. The exact locations of the other stores have not yet been disclosed. Kroger emphasized that the closures are a response to changing market conditions and consumer preferences, aiming to reallocate resources to more profitable locations and digital initiatives. The company has not provided specific details about the number of employees impacted by the closures but assured that affected workers will be offered opportunities to transfer to other Kroger locations where possible. This move follows a trend in the retail industry where companies are increasingly focusing on streamlining operations and investing in e-commerce to stay competitive. Kroger's decision reflects broader challenges faced by traditional grocery chains amid rising competition from online retailers and discount stores. The closures are expected to be completed within the next year and a half, with no further details on the financial impact or potential savings for the company.

Supermarket giant Kroger announced on Friday, June 20, its plan to close 60 stores across its 35-state footprint over the next 18 months. The Cincinnati-based retailer did not disclose specific locations but confirmed that the closures represent approximately 2% of its 2,731 stores operational at the start of its fiscal year. The company recorded a $100 million impairment charge related to the closures but anticipates a "modest financial benefit" from the move. Kroger pledged to reinvest the savings from the closures into enhancing the customer experience and assured that all affected employees would be offered roles in other stores. Interim CEO Ron Sargent, during a conference call with Wall Street analysts, stated that the unprofitable stores slated for closure are spread nationwide, with "ones and twos" affected in various markets and divisions. Kroger is also advancing more than 30 major store projects, including new larger Marketplace formats, through the end of the year. The company reaffirmed its capital expenditure plans for the year, allocating between $3.6 billion and $3.8 billion for new store construction, expansions, and renovations. Earlier this year, Kroger announced a $130 million investment in the Greater Cincinnati and Dayton region, including two new stores in Northern Kentucky, as competitor Publix expands into the area. The closures follow two rounds of layoffs of non-store workers this spring and come amid Kroger's search for a new CEO after Rodney McMullen's abrupt resignation on March 3 following an internal ethics investigation. Kroger reported first-quarter fiscal year results with an $866 million profit on $45.1 billion in sales, though profits declined by 8.6% and sales dipped slightly. The company also revised its sales guidance, projecting identical store sales (excluding gas) to grow between 2.25% and 3.25%, up from the previous range of 2% to 3%. One confirmed closure is the Kroger store at 1707 W. University Drive in McKinney, Texas, where affected employees will be offered transfers. The closures coincide with the recent failure of Kroger's merger with Albertsons, which collapsed in December, leading to a lawsuit from Albertsons alleging insufficient efforts to secure regulatory approval.