Kroger digital sales led total revenue growth in the grocery chain operator’s fiscal Q3.

Kroger’s total sales reached $33.86 billion in its fiscal Q3, which ended Nov. 8, 2025. That’s nearly flat (up about 0.67%) from $33.63 billion in its prior Q3. Meanwhile, identical sales in the quarter — excluding fuel — increased 2.6%. On a two-year stacked basis, identical sales without fuel increased 4.9%.

Kroger interim CEO Ronald Sargent said inflation, uncertainty around government funding and the pause in SNAP (Supplemental Nutrition Assistance Program) benefits during the final weeks of the retailer’s fiscal quarter “added incremental pressure” to Q3 identical sales without fuel. He noted that Kroger increased promotions during the pause in SNAP benefits but was “disciplined in those investments.” That led Kroger to balance its gross margin rate to ensure it could “deliver value in a sustainable way.”

Sargent said ecommerce “marks an important step” in how Kroger is evolving its business to meet customer needs and improve profitability. He also said Kroger is “evolving” its hybrid fulfillment model. It’s using automated fulfillment in places where customer demand supports doing so, he said. In addition, it’s leveraging store-based fulfillment through pickup and relationships with third-party delivery partners such as Instacart, DoorDash and Uber Eats.

“In today’s world, having a strong ecommerce offering is key to delivering a differentiated customer experience and also represents an important growth driver for our business,” Sargent told investors on Kroger’s quarterly earnings call.

Kroger ranks No. 6 in Digital Commerce 360’s Top 2000 Database. The database ranks North America’s largest online retailers by their annual ecommerce sales. Furthermore, Kroger is No. 1 in the database’s Food & Beverage category, though it competes with Mass Merchants — Walmart and Target — that rank higher in the Top 2000 for online grocery sales.

Kroger digital sales Q3

In Q3, Kroger digital sales increased 17% year over year. That made six consecutive quarters of Kroger ecommerce sales growing by double digits year over year.

Ecommerce and Kroger pharmacies led the retailer’s sales growth in Q3, Sargent said. Additionally, Kroger improved its ecommerce profitability, he said. Both pickup and delivery showed “strong” quarter-over-quarter improvement, according to Sargent, who did not quantify the growth.

The changes lead Kroger to expect its ecommerce business to be profitable in 2026, said David John Kennerley, chief financial officer.

In its fiscal Q3, the online orders Kroger delivered within two hours increased by more than 30%, Kennerley said. He added that Kroger can build on that customer data to improve its retail media network business, which would in turn increase digital sales.

“By integrating our customer data and loyalty insights with third-party platforms, we can bring more targeted and innovative media campaigns to reach new customer segments and create additional monetization opportunities,” Kennerley said.

Kroger’s retail media network business grew by double digits in Q3, Kennerley said without specifying further.

Changes to Kroger’s fulfillment model

The changes to Kroger’s fulfillment model “are fully consistent with our broader organizational goals to improve operational efficiency, to drive profitability and to more effectively utilize our stores,” Sargent said. “We will make these changes to our network through a phased approach, ensuring we maintain flexibility to adjust our plans while minimizing operational and customer disruption.”

Because of that shift, Kroger has decided to close three automated fulfillment centers that Sargent said haven’t met the retailer’s operational and financial expectations. Kroger expects to close those fulfillment centers by the end of January 2026. In areas where Kroger is closing fulfillment sites but still operating grocery stores, Kroger expects to retain customers and their ecommerce spend through store-based fulfillment and in-store shopping, Sargent said.

“This refreshed hybrid model helps us attract new customers, improve delivery speeds and leverages our growing store network,” Sargent said.

Additionally, Kroger expects the decisions to contribute $400 million in ecommerce profitability improvements, he added. In its first month working with DoorDash, the companies fulfilled 1 million orders, according to Sargent.

Kroger’s hybrid fulfillment model allows for increased optimization by using automated centers “when the right conditions exist” and third-party partners “for faster delivery while reaching new customers and incremental trips,” Kennerley said.

Where Kroger is investing in agentic AI

Sargent said Kroger is looking to emerging technologies such as agentic artificial intelligence (AI) to enhance customer experience. Kroger plans to introduce agentic AI-powered shopping capabilities in the first quarter of 2026, he added.

It will start by adding Instacart’s AI-powered Cart Assistant to Kroger’s ecommerce website and mobile app.

“The Cart Assistant will help customers shop more effortlessly by making it easier to build personalized baskets, find meal ideas and save time,” Sargent said.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s our last update on Kroger digital sales.

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