The Kroger Co: The Menu Looks Tasty, But Will the Meal Deliver?

Research evidence excerpt

The Kroger Co: The Menu Looks Tasty, But Will the Meal Deliver?

KR will provide more detail on its pricing strategy as part of an October 2026

Analyst Day

The retailer is awaiting results of pricing experiments undertaken in certain markets

before it endorses a more detailed plan.

The retailer is clear on what changes it would like to make to its pricing strategy. It

believes it needs to become more competitive with cost leaders like WMT & COST,

while extending price gaps vs. traditional grocers. However, it is not certain under

what timeline it will be making those investments and when it expects to see

results in the form of winning back lost customers.

It is currently piloting full-store pricing changes across 125 stores in select markets.

It is a similar playbook that its CEO executed in his time as head of WMT US. It will

take the learnings from these experiments to inform a broader rollout of pricing

changes beyond the initial cohort of stores. There will be further detail on specific

timing and sequencing of changes it intends to make at its October Analyst Day.

Importantly, KR is confident that it does not need a margin reset in order to

effectuate the pricing changes it would like to make as it will fund them with cost

savings. It is not looking to lead on price and is not looking to engage in a price

competition with peers. The CEO has experienced similar dynamics in the past

from his time at WMT and doesn't view it as a worthwhile endeavor for KR.

The strategy will be indexed towards becoming price competitive with larger

players like WMT & COST, while extending a price advantage over traditional

grocers. For now, the company is more focused on taking share from traditional

grocers. As it extends its lead against that cohort, it can then start to think about