Kroger to Close 60 Stores as Part of Strategic Shift
Kroger, one of the largest grocery retailers in the United States, has announced it will be closing 60 of its stores nationwide over the next 18 months. The company has framed the move as part of a strategic effort to improve operational efficiency and reinvest the savings into enhancing the overall customer experience.
Cover Photo by Clark Gu on Unsplash
Kroger to Close 60 Stores as Part of Strategic Shift
Kroger, one of the largest grocery retailers in the United States, has announced it will be closing 60 of its stores nationwide over the next 18 months. The company has framed the move as part of a strategic effort to improve operational efficiency and reinvest the savings into enhancing the overall customer experience.
While a complete list of the locations slated for closure has not yet been made public, a store in McKinney, Texas, has been confirmed as one of the sites that will be shut down. These closures represent about 5% of Kroger's 1,239 branded grocery stores spread across 16 states.
In its first-quarter earnings report, Kroger disclosed that it had taken a $100 million impairment charge related to the planned closures. The company anticipates a "modest financial benefit" from this decision, which will be funneled back into store improvements and customer-facing initiatives. Despite the closures, Kroger affirmed that the decision will not affect its full-year financial guidance and has even raised its sales outlook for the year.
Kroger has committed to offering new roles at other locations to all employees affected by the store shutdowns. The announcement follows a failed merger attempt with competitor Albertsons last year, prompting a strategic pivot. The company is now focusing on a plan that includes remodeling existing stores and opening new ones, with 30 major store projects slated for 2025.
Although the company's total sales saw a slight dip in the first quarter compared to the previous year, it has experienced strong growth in key areas like e-commerce and its specialty pharmacy business. Kroger executives remain confident in their forward-looking strategy, which prioritizes fresh products, the company's own private-label brands, and a robust e-commerce platform to navigate the current economic landscape.
Sources
CBS News: Kroger to close 60 stores
WFAA: North Texas Kroger store among those closing nationwide
Click2Houston: Kroger announces plans to close 60 stores over the next 18 months
