Kroger, which owns supermarket chains such as Harris Teeter, Fred Meyer, and Ralphs, is making a notable change to its workforce operations as price-conscious customers increasingly turn to rival retailers.
The company has been struggling to significantly boost its sales as customers grow more cautious about their spending. Kroger revealed in its latest earnings report that its identical sales (excluding fuel) increased 0.2% year over year in the second quarter of 2026.
According to a Numerator report, shoppers have been gradually shifting their spending elsewhere, with more than $12 billion in CPG (consumer packaged goods) spending moving from Kroger to Walmart, Costco, and Amazon over the past year.
On an earnings call in September, Kroger CEO Greg Foran said customers continue to be “disciplined” with their spending in stores amid economic pressures such as “reductions in SNAP benefits” and “higher fuel prices.” He emphasized that “customers have choices, and it is up to us to provide them with that choice.”
Kroger plans thousands of corporate layoffs
Amid its efforts to win over customers during a period of economic uncertainty, Kroger has decided to shrink its corporate workforce, a move it claims will help make its in-store pricing more affordable.
According to a recent Bloomberg report, Foran sent a memo to employees revealing Kroger’s plan to cut roughly 3,000 corporate jobs across multiple departments over the next three years. It currently has 8,200 corporate employees, making this round of layoffs one of the largest in the company’s history.
“Simplifying means making faster decisions and deploying more resources where they matter most,” wrote Foran in the memo.
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He said the company has too many layers and too much overhead. Foran revealed that Kroger will reduce duplicative work and use technologies such as artificial intelligence to streamline its workflow.
In the memo, he also said the job cuts will help the company put more resources toward reducing prices in its stores, enhancing the customer shopping experience, and investing in frontline employees.
Kroger plans to share more details in the next few months about which roles will be affected by the layoffs.
Kroger looks to regain its competitive edge
Kroger’s upcoming job cuts come after it laid off nearly 1,000 corporate employees last year to cut costs, a move executed under the leadership of Ronald Sargent, who served as the company’s interim CEO in 2025.
Foran became Kroger’s CEO on Feb. 9, and during a March earnings call, he said his plan for the company is to double down on offering lower prices to shoppers.
To help push this initiative, he said he will continue to remove unproductive costs from the business, modernize workflow, invest in everyday value, improve promotions, and ensure that customers notice the changes in stores.
“The savings we generate will be reinvested directly into lower prices and better service for our customers,” said Foran on the call in March. “That’s how we will fund our growth. Customers want convenience and are increasingly shopping online to buy food. We have the assets to meet that demand, and e-commerce is a key focus area for us.”
Foran later announced in a May Bloomberg report that he was cutting prices on thousands of items in Kroger’s stores.
Kroger faces mounting pressure as shoppers feel the squeeze
Kroger’s sales growth has “lagged food retail peers” over the past three years, Morgan Stanley equity analyst Simeon Gutman and co-authors wrote in an Oct. 13 analyst note obtained by TheStreet.
The analysts said Kroger must “improve everyday value by redirecting existing special promotional spending, generating efficiencies and earning incremental gross profit to fund continued reinvestment.”
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To accomplish this, they said, “aggressive, creative and surgical efficiencies across sourcing, distribution, promotional spending and overhead are needed, without compromising the customer experience.”
They emphasized that Kroger’s recent move to cut 3,000 corporate jobs in three years is “a first step, with savings earmarked for lower prices and frontline investment.”
Kroger’s renewed focus on lowering prices comes as consumers continue to feel the strain of economic pressures.
Recent University of Michigan Survey of Consumers data found that consumer sentiment fell 1.8 index points from September in preliminary results for October.
“Overall, sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply this month, groups that have fewer resources to weather increases in prices,” said Joanne Hsu, a University of Michigan economist and director of the Surveys of Consumers, in a statement.
“Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year,” she continued.
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