Kroger’s New CEO Bets on Deals, AI and eCommerce to Boost Sales

Kroger’s new CEO Greg Foran is signaling a shift in strategy toward sharper pricing and stronger digital engagement as the grocery giant looks to accelerate sales growth.

Reporting its Q4 earnings Thursday (March 5), the newly appointed chief executive outlined a plan centered on better deals, improved store execution and a faster-growing online business. The message: Kroger intends to compete harder on value while using digital capabilities to deepen customer loyalty.

Foran, once C.E.O. of Walmart U.S., took the helm at Kroger roughly a month ago. On Thursday’s earnings call, he said that his priority is accelerating top-line growth by removing inefficiencies from the business and reinvesting the savings into lower prices, promotions and better in-store and online experiences.

“Customers need to trust that they’re getting a fair deal every time they walk into our stores,” Foran said. “We’ve made progress on price, and I want to keep pushing by pulling unproductive costs out of the business, investing in everyday value, sharpening our promotions and making sure customers see and feel the difference when they shop with us.”

Certainly, consumers are interested in lower prices right now. PYMNTS Intelligence research has found that 62% of consumers facing cost of living challenges—or 52% of consumers overall—have cut back on their everyday spending.

Digital channels will play a central role for Kroger. The grocer plans to expand its hybrid fulfillment model, using stores as hubs for online order picking while partnering with delivery providers such as Instacart, DoorDash and Uber’s delivery platforms to reduce last-mile costs and speed delivery.

“By using our stores as fulfillment hubs, we get inventory closer to customers, reduce last mile costs and offer the speed and convenience that customers are looking for,” Foran said.

In the fourth quarter, Kroger’s adjusted eCommerce sales jumped 20%, the latest in seven consecutive quarters of double-digit online growth.

Kroger is also investing in artificial intelligence (AI) tools to improve operations, labor scheduling and digital shopping experiences, including an in-house online shopping assistant that will expand nationwide later this year.

In January, Google Cloud announced that it is working with Kroger to deploy Gemini Enterprise for Customer Experience. Kroger’s leadership expects its technology investments, along with improvements in sourcing and procurement, to generate productivity gains that fund ongoing investments in pricing and customer experience.