Cincinnati-based Kroger Co. says it plans to close 60 of its more than 2,700 stores over the next 18 months. The announcement came in the company's first quarter 2025 results.
"In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closing of approximately 60 stores over the next 18 months. As a result of these store closures, Kroger expects a modest financial benefit," the company said in the statement.
The company didn't say which stores will be closed, though Chairman and Interim CEO Ron Sargent was asked about it during Friday morning's webcast.
"We usually evaluate individual store performance on an annual basis, and we continue to do that, but we deferred closing any stores due to the merger process, so we see this as an opportunity to move these closed-store sales to other stores, and we think that we should improve profitability," he said. "The geography is spread, really, around the country. It's kind of ones and twos by division and all the associates who are affected will be offered jobs in their other stores."
The release says the savings Kroger sees from the closures will go back into the customer experience and isn't expected to affect full-year guidance.
Kroger said it had a strong first quarter led by its pharmacy, e-commerce, and fresh sales.
"Total company sales were $45.1 billion in the first quarter compared to $45.3 billion for the same period last year, which included $917 million from Kroger Specialty Pharmacy sales," according to the statement. "Excluding fuel, Kroger Specialty Pharmacy and adjustment items, sales increased 3.7% compared to the same period last year."
Sargent was named chairman and interim CEO in March.
Former Kroger Chairman and CEO Rodney McMullen resigned March 3, citing issues related to his personal conduct.
In a statement, Kroger said McMullen resigned "following a Board investigation of his personal conduct that, while unrelated to the business, was inconsistent with Kroger's Policy on Business Ethics." It did not say what that conduct entailed.
Kroger said its Board of Directors learned of "certain personal conduct" on Feb. 21 and hired an outside attorney to conduct an investigation. The company didn't release further details of the investigation or its findings.
The merger that wasn't
Kroger is currently locked in a legal battle with rival supermarket chain Albertsons. The two announced plans to merge in October 2022. The deal was valued at $24.6 billion.
In December 2024, a federal judge halted the planned merger between Kroger and the Idaho-based grocer.
A day later, Albertsons abandoned the merger and sued Kroger, alleging a willful breach of contract for not doing enough to win regulatory approval for the merger. Kroger responded, saying Albertsons was deflecting its own responsibility. Albertsons said Kroger didn't work hard enough to get federal approval for the merger and owes a $600 million termination fee stipulated in the initial merger agreement, plus billions in damages.
In March, Kroger pushed back, again, filing a countersuit accusing Albertsons executives of plotting with C&S Wholesale Grocers and secretly pursuing a separate strategy for regulatory approval that undermined Kroger's. C&S was lined up to buy hundreds of stores from Kroger to allay antitrust concerns. Kroger claims Albertsons convinced C&S to criticize its deal with Kroger, giving federal regulators pause.
Albertsons — which operates brands such as Safeway and Vons — is the second-largest supermarket operator in the U.S. behind Kroger.
Kroger operates more than 2,700 supermarket and multi-department stores under 20 brands, including Ralphs, Harris Teeter, Fred Meyer and King Soopers, across 35 states and the District of Columbia.
While Kroger and Albertsons are the largest grocery chains, Walmart has the largest share of the grocery market.
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