Kroger Slashes Sales Growth Outlook as Strained Consumers Pivot to Essentials
A challenging macro environment and other issues affecting the grocery industry led Kroger to lower its 2026 full-year guidance for identical sales without fuel, executives said Friday (Sept. 11) during a second quarter earnings call. Kroger lowered its guidance for identical sales without fuel to 0.2% to 0.8%, down from the guidance of 1.0% to […] The post Kroger Slashes Sales Growth Outlook as…
Kroger has reduced its 2026 sales growth outlook, citing a difficult economic climate and other challenges impacting the grocery sector, executives announced on Friday during a second quarter earnings call. The company lowered its projected identical sales without fuel growth from 1.0% to 2.0% to 0.2% to 0.8% for the year, according to a presentation released on Friday.
This adjustment was made after the company reported a 0.2% increase in identical sales without fuel during the second quarter, down from the 3.4% growth seen in the same period last year.
Kroger CEO Greg Foran stated during the call that while grocery traffic increased during the second quarter, the macro environment remained challenging. Factors such as reduced SNAP benefits, higher fuel prices, and softer consumer confidence are putting pressure on household budgets, leading consumers to make more "need-based" purchases, Foran explained.
Executive Vice President and Chief Financial Officer David Kennerley added that second-quarter sales were weaker than expected, citing impacts from the Inflation Reduction Act, a shift towards generic prescriptions, a cyclospora outbreak affecting produce sales, and egg price deflation. These factors collectively offset a 265-basis-point drag on sales without fuel during the quarter.
Kennerley noted that while overall food inflation was modestly higher than in the first quarter, grocery unit growth decelerated slightly compared to the first quarter, driven by various factors. The company's first-half results, combined with ongoing pressures through the end of the year, inform the updated guidance for full-year identical sales without fuel, according to Kennerley.
He acknowledged lingering effects from the cyclospora outbreak, but expressed cautious optimism that trends are improving, though the company remains cautious about the duration of these impacts and the potential for further headwinds to sales without fuel in the third quarter.
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