The Kroger Co. announced March 7 that it grew digital sales in its fiscal fourth quarter ended Feb. 3, as identical sales excluding fuel decreased slightly.

In a March 7 earnings call with investors, CEO Rodney McMullen said a “strong and growing store network is important.”

“Many of the ways we go to market in digital still comes through the store channel,” McMullen said. “We know that our most profitable customers shop both in-store and online. So it’s important to be there for our customers in a way they choose to shop with us.”

Kroger is No. 8 in the Top 1000, Digital Commerce 360’s database ranking the largest online retailers in North America. Furthermore, Kroger is first in the Top 1000’s Food/Beverage category.

Kroger digital sales in Q4 2023

In its fiscal Q4, Kroger digital sales grew more than 10%. Meanwhile, Kroger’s total sales grew to $37.1 billion in Q4 2023, up from $34.8 billion in Q4 2022.

Customers who shop both in-store and online spend three to four times more than in-store-only shoppers, McMullen said.

“Moving promotions online allowed Kroger to take personalization to a new level, targeting customers more efficiently and increasing the breadth and depth of promotions,” McMullen said.

That led to an 18% increase in digitally engaged households in Q4, he added.

In fiscal 2023, Kroger digital sales grew 12% to reach $12 billion. The retailer also increased delivery sales 24% year over year. Total Kroger sales in fiscal 2023 were $150.0 billion, up from $148.3 billion in 2022.

Kroger customers clipped 4 billion digital coupons in 2023, which is 1 billion more than in 2022, McMullen said.

“Digital is an important growth accelerator in our business,” McMullen said. “And in 2024, we expect to deliver another year of double-digit sales growth.”

Neil Saunders, managing director at retail analysis firm GlobalData, said trends for many of Kroger’s metrics point to wider problems for the company and the grocery sector overall.

“While Kroger’s operating profit and net income numbers were both elevated and strong during the final quarter, the sales line is looking a lot shabbier,” Saunders said. “Total growth of 6.4% looks robust, but it is flattered by the addition of $2.7 billion from an extra week of trade. When this is removed, total sales declined by 1.3%.”

Possible merger with Albertsons

The Federal Trade Commission (FTC) is suing to block Kroger’s proposed $24.6 billion acquisition of Albertsons. The FTC called the deal “anticompetitive” in a statement released Feb. 26.

The two grocery retailers first proposed the deal in 2022. Kroger was slated to buy Albertsons at the time, pending regulatory approval. The merger would allow the chains to create a “premier omnichannel food retailer,” Kroger said in a statement at the time. Together, the retailers would operate more than 5,000 stores across 48 states, with nearly 700,000 employees.

Albertsons is No. 26 in the Top 1000, and second in the Top 1000’s Food/Beverage category.

Data from Placer.ai shows that Kroger was the nation’s most-visited grocery store chain in 2023. It captured 18.8% of annual foot traffic to the 10 most-frequented grocery chains. Safeway, under the Albertsons umbrella, took 10.5% of foot traffic. Aldi had the fourth-most foot traffic (9.4%) among the top 10.

Foot traffic at Kroger grew in three of the last four months. Kroger foot traffic grew 4.9% year over year in February 2024, according to Placer.ai. In January, it decreased 1.2% year over year. It grew 2.7% in December 2023 and 0.4% in November, Placer.ai data shows.

Aldi US expansion

The same day that Kroger announced its earnings, competitor Aldi announced plans to add 800 stores throughout the U.S. by 2028. Aldi also announced that it completed its acquisition of Southeastern Grocers Inc. and its Winn-Dixie and Harveys Supermarket banners.

Southeastern Grocers is an omnichannel retailer with brick-and-mortar grocery stores and liquor stores. It has an online presence, too, with grocery delivery and curbside pickup throughout Alabama, Florida, Georgia, Louisiana and Mississippi.

Aldi said it will invest more than $9 billion over the next five years in its U.S. expansion. The grocer said it will add new locations throughout the country and said it will enter new cities including Las Vegas.

Kroger earnings

For the fiscal fourth quarter ended Feb. 3, 2024, Kroger reported:

• Total sales excluding fuel dipped slightly to $37.1 billion. That’s down 0.5% from $34.8 billion in Q4 2022.
• Comparable sales excluding fuel decreased 0.8%.
• Operating profit grew to $1.19 billion from $826 million in the prior-year period.
• Kroger digital sales grew more than 10%.

For the 12 months ended Feb. 3, 2024, Kroger reported:

• Total sales excluding fuel grew to $150.0 billion. That’s up 1.1% from $148.3 billion in 2022.
• Comparable sales excluding fuel increased 0.9%.
• Operating profit decreased to about $3.09 billion from $4.12 billion the prior year.
• Kroger digital sales grew to $12 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. 

Do you rank in our databases?

Submit your data and we’ll see where you fit in our next ranking update.