The Kroger Co.’s ecommerce business drove growth in its fiscal Q1, as digital sales grew while total sales declined.
Kroger total sales in Q1, which ended May 24, reached $45.12 billion. That’s down from $45.27 billion the year before. However, the retailer noted that excluding fuel and its specialty pharmacy, its sales grew 3.7% in its Q1, which ended May 24.
Kroger chairman and CEO Ronald Sargent told investors on the retailer’s earnings call that it’s “aggressively looking for ways to reduce costs throughout the company.” He added that Kroger expects to “reinvest those cost savings directly into lower prices and additional store hours.”
That comes as “customers continue to spend cautiously in an uncertain economic environment,” he told investors.
They’re buying discounted products more often as well as from Kroger’s owned brands. In an effort to keep prices low, he said, Kroger is watching the changing environment around tariffs.
“Where we do see potential tariff impact, we are proactively looking for ways to avoid raising prices for our customers, and we consider price changes as a last resort. Tariffs have not had a material impact on our business so far,” Sargent told investors. “And given what we know today, we do not expect them to going forward.”
He also emphasized that Kroger has created an ecommerce business unit that Yael Cosset, its chief digital officer, is leaning to align “all areas of the online customer experience.”
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 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 Q1 2025
In Q1, Kroger grew digital sales 15% year over year. That’s the fourth consecutive quarter in which Kroger ecommerce sales grew at least 10%. It’s also the 12th straight with positive ecommerce sales growth. Kroger digital sales in Q1 2022 had decreased following large growth the prior year, when COVID-19 pandemic restrictions were still in place.
Sargent said ecommerce “continues to be a key part” of Kroger’s business.
“To keep improving the customer experience, we are working to deliver more accurate orders faster and reduced pickup wait times,” Sargent told investors. “These improvements are attracting new households to ecommerce and giving our current households more reasons to shop with us.”
He added that Kroger’s “best customers” shop with the retailer through both ecommerce and in stores.
Chief financial officer David Kennerley, who took over the role from retiring Todd Foley as of April 3, said he’s focused on improving Kroger’s ecommerce profitability.
“Our new ecommerce structure unifies all teams contributing to our ecommerce experience,” Kennerley told investors. Their efforts, “will center on deploying new technology, improving density in our fulfillment operations and accelerating the growth of our retail media platform. We expect these initiatives to be significant drivers of our ecommerce acceleration.”
Kroger store closures in 2025 and 2026
“Unfortunately, today, not all of our stores are delivering the sustainable results we need,” Sargent said. “It’s also important to note, we paused our annual store review during the merger process.”
As a result, Kroger plans to close about 60 stores over the next 18 months, he said. At the same time, Kroger expects “to accelerate new store openings in 2026 and beyond in high-growth geographies,” he added.
For the remainder of its fiscal 2025, Kroger is raising its guidance for identical sales excluding fuel to a range of 2.25% to 3.25% growth.
“We expect second quarter identical sales without fuel to be roughly at the midpoint of our full year guidance range,” Kennerley said.
“There is a modest financial benefit to closing these stores,” he added.
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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