Kroger Co.’s digital sales rose 20% year over year in its fiscal Q2 2026, as promotions and faster delivery helped draw more shoppers into its online ecosystem.
The increase, for the quarter ended Aug. 15, followed Kroger’s ecommerce growth of 19% in Q1.
Speaking on the company’s Q2 earnings call, CEO Gregory Foran said ecommerce was profitable for a second straight quarter. “Ecommerce is where most of the growth in our industry will come from over the next several years, and we intend to take our share of it,” Foran told analysts.
Kroger’s ecommerce business includes its retail media network, Kroger Precision Marketing (KPM). KPM profit increased 24% year over year in Q2, according to the company’s earnings release. Foran said it was the network’s strongest growth since 2021.
Kroger’s online business continued to outpace overall sales, which rose just 2.0% in the quarter. Executives said more cautious shoppers bought fewer items per trip, while lower pharmacy prices and a cyclospora outbreak also weighed on sales.
Total sales increased to $34.62 billion, up from $33.94 billion a year earlier. Identical sales, not including fuel, rose 0.2% year over year. This was down from 1.0% growth in Q1. The metric tracks sales at established stores and includes eligible online purchases.
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. Kroger is also 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 in Q2 2026
Kroger’s 20% adjusted ecommerce growth excluded the effects of fulfillment center exits in markets where it does not operate stores. It also excluded the sale of online health retailer Vitacost in January and the discontinuation of Ship, which offered products from third-party sellers for home delivery.
During Q2, the grocer attracted 20% more new ecommerce customers than a year earlier, helped by its online deal days, Foran said. Kroger is also leaning harder into store‑based fulfillment, with delivery orders arriving in less than an hour continuing to grow.
“Demand continues to shift towards faster fulfillment and we are positioning our network to meet it,” Foran said.
In Q1, delivery in under an hour accounted for about half of digital sales growth, chief financial officer David Kennerley said on that quarter’s earnings call. He credited partnerships with DoorDash and Uber Eats with helping Kroger use its stores to reach new customers and deliver orders faster.
Kroger added another delivery option after the quarter ended. On Aug. 24, it launched combined grocery and prescription orders through its websites and apps across nearly all retail banners. Instacart shoppers deliver the orders from Kroger stores, the companies said.
To support its digital expansion, Kroger also recently appointed Nate Faust as executive vice president and chief ecommerce officer. Faust, a Jet.com co‑founder and former head of Walmart’s U.S. ecommerce supply chain, brings more than two decades of ecommerce experience to the role, Foran said.
Kroger lowers its full-year sales outlook
While Kroger’s traffic inched up in Q2, shoppers bought fewer items and spent less per transaction, Foran said. He cited higher fuel prices, reduced benefits under the Supplemental Nutrition Assistance Program (SNAP) and weaker consumer confidence as weighing on household budgets.
“Customers are looking for value, but they are not willing to compromise on quality,” he said.
Kroger’s store brands grew faster than national brands and accounted for a larger share of its business, Foran said. For example, sales of its premium Private Selection line rose more than 14%, helped by new ready-to-heat and ready-to-eat meals.
Pharmacy pricing also weighed on revenue. The Inflation Reduction Act, a 2022 federal law, allowed Medicare to negotiate prices for certain drugs. The first negotiated prices took effect Jan. 1, 2026, according to the Centers for Medicare & Medicaid Services. Kennerley said pricing changes tied to the law and a shift toward generic prescriptions reduced Kroger’s sales without lowering profit.
Together with falling egg prices and a Cyclospora outbreak that hurt produce sales, those factors reduced identical-sales growth by 2.65 percentage points, he said.
reduced identical-sales growth excluding fuel by 2.65 percentage points
Kroger also lowered its full-year identical-sales growth forecast, excluding fuel, to 0.2% to 0.8%. This is down from the previous 1.0% to 2.0%. Kennerley said the outbreak’s effects lingered into early Q3, although “trends are improving.”
He also pointed to tougher comparisons ahead: In Q4, Kroger will begin comparing results with the sales boost from third-party delivery partnerships that began last October.
Still, Kroger reported adjusted earnings of $1.09 per share in Q2, up 5% from a year earlier.
“While sales were soft in the quarter, earnings continued to benefit from gross profit improvement, cost savings, fuel contribution and the progress we are making in ecommerce and media,” Kennerley said.
Giant Eagle deal and October investor update
Kroger is also pursuing more growth through its planned $1.65 billion acquisition of Giant Eagle. The regional grocer operates 197 supermarkets and 11 standalone pharmacies across five states, including Ohio and Pennsylvania.
Kroger said the combination would let it bring its ecommerce, data and personalization capabilities to Giant Eagle’s store base. The companies said they expect to sell a limited number of Giant Eagle stores to secure regulatory clearance.
“We continue to expect the transaction to close in 2027 and remain focused on working through the regulatory review process,” Foran said.
Meanwhile, Kroger will outline its longer-term plans at an Oct. 20 investor update. Foran said the company would explain how it plans to grow sales in stores and online, use cost savings to improve the customer experience and strengthen earnings.
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