Kroger, the largest standalone supermarket chain in the US, has laid out a plan to win back shoppers with lower prices and new stores, and AI is a big part of how it intends to pay for it. At an investor event on 20 October, the company announced a $5 billion investment in prices and the shopping experience through 2029, Reuters reports.
Where the money comes from
Kroger’s chief financial officer, David Kennerley, said the $5 billion “is the largest single driver in this plan and it is entirely self-funded”. In other words, Kroger expects to find the money by running itself more cheaply, not by borrowing.
Part of that saving is people. Earlier this month chief executive Greg Foran told staff in a memo that Kroger would cut about a third of its corporate roles over three years, using AI to reduce duplicated work. The Associated Press put the number at 3,000 corporate jobs. Kroger also says it will save through buying more directly from suppliers and using “technology and AI” to run its operations more simply.
AI on the shop floor
The plan is not only about head office. Grocery Dive reports that Foran said Kroger is investing in digital shelf labels (electronic price tags that can be changed remotely), robotics and AI to keep shelves stocked and priced more quickly and accurately.
Kroger’s new store designs are tied to what it calls a “connected store” programme. That includes an improved shopping app and AI tools meant to take routine work off store staff so they can spend more time helping customers. Each new store will also get a larger back room for packing online pickup and delivery orders.
The bigger picture
- Kroger plans to open 110 new stores over three years under a new “Fresh” format, in three sizes.
- It wants to grow online sales and its advertising business, which sells ad space to brands using shopper data.
- It is aiming for about 3% growth in like-for-like sales by 2029.
Reuters says the plan comes amid “intensifying competition” and cautious consumer spending. The AP has noted the pressure Kroger faces from discounters such as Aldi and Lidl, as well as Walmart and Amazon. Kroger’s shares rose as much as 2.6% after the announcement.
What it means for you
If you shop at Kroger or its sister chains, such as Ralphs, King Soopers, Fred Meyer or Smith’s, the company is promising sharper prices and more fresh food over the next few years. You may also notice electronic shelf tags and more AI features in the app. For workers, the message is mixed: Kroger says AI will make store jobs easier, but it is also using AI to shrink its office workforce. That pattern, with automation in back offices paying for spending elsewhere, is becoming common across big retailers.
Sources
- Kroger to invest $5 billion by 2029 as new CEO sharpens grocery focus — Reuters (via Investing.com)
- Kroger unveils 3 refreshed store formats — Grocery Dive