Over the past few months, Kroger has seen a slight decline in consumer demand due to recent economic uncertainty and increased competition.
In the third quarter of this year, Kroger’s same sales (excluding fuel) increased 2.6% year over year, according to Kroger’s latest earnings report.
However, the latest data shared with TheStreet by market research firm Numerator shows that Kroger captured 8.5% of the grocery market in the current quarter, down slightly from 8.8% in the same period in 2024.
Walmart is the No. 1 grocery retailer by dollar share, while Kroger is No. 2, according to Numerator. Costco lags behind Kroger; however, warehouse clubs are winning over consumers, increasing their market share to 8.2% this quarter from 8% in last year’s third quarter.
Kroger’s general, operating and administrative expenses soared 44% and it lost $1.3 billion in the third quarter as it battled increasing competition for consumer dollars.
Kroger faces increasing competition as it tries to attract price-sensitive customers. Jennifer G. Lang/Shutterstock
During a Dec. 4 earnings call, Kroger interim CEO Ronald Sargent warned that consumer confidence has declined in recent months due to concerns about inflation, a slowing job market and other factors, causing shoppers to continue to scale back spending, especially on discretionary purchases.
“I just think customers are carefully managing their budgets,” Sargent said. “They’re traveling more and less. They’re traveling less and less. The idea of ​​stocking up is declining a little bit. We’re seeing that in the current economic climate, high-income, high-end shoppers continue to spend, while lower-income consumers are more aggressively pulling back.”
He said middle-income consumers are increasingly looking for value, noting that sales slowed in the second half of the third quarter as SNAP benefits were suspended, before benefits were quickly restored after the government shutdown ended last month.
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“Going forward, I think consumers are going to be cautious,” Sargent said. “I think people are going to focus more on food and less on the discretionary category.”
Consumer confidence fell sharply in November as concerns about the economy intensified, especially during the government shutdown from October 1 to November 12.
November consumer confidence index reject go through almost 5% Starting in October.
Specifically, emotions regarding current personal finances and durable goods purchasing conditions reduced10% .
Furthermore, inflation expectations for the next year, which measures how much consumers expect prices to rise, are only reduce from 4.6% October to 4.5% November. Source: University of Michigan
“Market sentiment has picked up slightly from mid-month following the end of the federal shutdown,” Joanne Hsu, director of the University of Michigan Consumer Survey, said in a statement. “However, consumers remain frustrated by continued high prices and declining incomes.”
Amid declining consumer confidence, Kroger is doubling down on its efforts to attract customers by extending hours, improving checkout speeds, service and inventory levels.
“These investments are delivering tangible results, including significant year-on-year reductions in customer wait times,” Sargent said.
Kroger has also expanded relationships with third-party delivery providers Instacart, DoorDash and Uber Eats to make grocery delivery faster.
“Orders delivered in two hours or less are up more than 30%, reflecting increased immediate demand,” Kroger Chief Financial Officer David Kennerley said on the earnings call.
The grocery chain also lowered prices on more than 1,000 items in the third quarter and plans to continue ramping up promotions during the holidays to help boost sales.
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However, in order to keep lowering prices in stores, Kroger is relying on several bold cost-cutting measures. In August, for example, Kroger announced plans to cut nearly 1,000 corporate jobs in an effort to “simplify” its organization.
It also announced the closure of three automated fulfillment centers that failed to meet operational and financial expectations and will close by the end of January 2026.
Additionally, Kroger unveiled plans in June to close about 60 underperforming stores in the United States over the next 18 months.
In a recent interview with The Wall Street Journal, Sargent said the savings from these cost-cutting decisions will not only help lower prices at stores but also extend the hours of operation for bakeries, delis and other store services.
“This would be a great example of taking money out of a part of the business and bringing it closer to the customer,” Sargent said in an interview.
Kroger is increasingly focused on making its prices more affordable for customers in stores as more Americans are changing the way they shop amid concerns about rising grocery prices, according to a recent LendingTree survey.
About 61% of Americans report stress about paying for groceries.
return, 88% have Adjust their grocery shopping habits Because they face higher costs.
Specifically, 44% say they are buying more generic brands, 38% stick to their shopping list, and 29% Pay more attention to price. Source: LendingTree
“It’s understandable to feel powerless in the face of sky-high prices and interest rates, but there are steps you can take to make a difference,” Matt Schulz, chief consumer finance analyst at LendingTree, said in the survey. “Shopping around has its benefits. Using a rewards credit card can put money back into your pocket and help stretch your budget.”
“Using a 0% APR credit card or a low-interest personal loan to consolidate debt and get a lower interest rate can free up money for other goals,” Schultz says. “You can grow your emergency fund with a high-yield savings account.”
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This article was originally published by TheStreet on December 7, 2025, and first appeared in the Retail section. Click here to add TheStreet as your preferred source.
