Kroger has lowered its sales expectations for the year as American shoppers become more cautious about their spending, highlighting the growing pressure facing one of the country’s largest supermarket operators.
The retailer now expects identical sales excluding fuel to increase by between 0.2% and 0.8% in fiscal 2026. That is a significant reduction from its previous expectation of 1% to 2% growth.
The change does not mean Kroger’s overall sales are falling. In its latest quarter, Kroger reported sales of approximately $34.6 billion, up from about $33.9 billion a year earlier. However, comparable sales growth was only 0.2%, showing that the underlying sales environment is becoming considerably more difficult.
Kroger said consumer spending remains under pressure as households become more selective about what they buy. Customers are increasingly concentrating their spending on essential products, while higher prices and uncertainty about household finances are making shoppers more careful about the size of their weekly baskets.
The supermarket group is also dealing with pressure from its pharmacy business and the impact of lower egg prices. A cyclospora outbreak affecting produce also weighed on comparable sales during the quarter.
Despite the weaker sales outlook, Kroger has maintained its full-year adjusted earnings expectation of $5.10 to $5.30 per share. The company is therefore focusing on controlling costs and improving profitability even as sales growth slows.
There are also positive areas of the business. Kroger’s e-commerce sales grew strongly, while its retail media business continued to expand. Adjusted earnings per share reached $1.09 in the latest quarter, ahead of market expectations.
The revised forecast nevertheless sends an important message about the American grocery market. Even when consumers continue to visit supermarkets, they are becoming more disciplined about what they put into their baskets.
For Kroger, the challenge for the remainder of the year will be to maintain customer traffic, keep prices competitive and increase the value of each shopping trip while protecting margins. With Walmart and other major retailers continuing to compete aggressively on price, the battle for the American grocery shopper is becoming increasingly focused on value.