Over the past few months, Kroger has seen a slight decline in consumer demand amid recent economic uncertainty and increased competition.
During the third quarter of this year, Kroger saw its identical sales (excluding fuel) increase by 2.6% year over year, according to its latest earnings report.
However, recent data from market research company Numerator, which was shared with TheStreet, revealed that Kroger captured 8.5% of the grocery market share during the quarter, down slightly from the 8.8% it had during the same period in 2024.
According to Numerator, Walmart is the number one grocery retailer by dollar share, while Kroger holds the number two spot. Costco falls behind Kroger; however, the store club is gaining steam among consumers as it managed to increase its market share to 8.2% during the quarter, up from 8% during the third quarter of last year.
As Kroger fights for consumer dollars amid increasing competition, it suffered a loss of $1.3 billion during the third quarter, after its general, operating and administrative expenses rose 44%.
Kroger is facing increased competition as it tries to attract price-conscious customers.Jennifer G. Lang / Shutterstock
During an earnings call on December 4, Kroger’s interim CEO Ronald Sargent warned that consumer sentiment has weakened in recent months due to concerns about inflation, the shrinking labor market, and other factors, which are causing shoppers to continue to pull back their spending, especially when it comes to discretionary purchases.
“I just think that customers are managing their budgets carefully,” Sargent said. “And they’re making more trips. They’re making smaller trips. The storage idea is slowing down a little bit. And we’re seeing this economy where high-income shoppers continue to spend, while lower-income customers are pulling back more aggressively.”
He said middle-income consumers are increasingly looking for value, and indicated that sales during the latter half of the third quarter were down due to the pause in SNAP benefits, which resumed quickly after the government shutdown that ended last month.
Related: Home Depot CEO sounds alarm over troubling trend of in-store shoppers
“Going forward, I think the consumer will remain cautious,” Sargent said. “I think there will be more focus on food items and less on discretionary categories.”
In November, consumer sentiment fell significantly as concerns about the economy intensified, particularly during the government shutdown, which lasted from October 1 to November 12.
In November, consumer sentiment declined from almost 5% from October.
Specifically, feeling about current personal finances and purchasing conditions for durable goods decreased by10% .
Also, inflation expectations for the coming year (which measure how much consumers expect prices to rise) only declined from 4.6% in October to 4.5% in November. Source: University of Michigan
“After the federal shutdown ended, sentiment lifted slightly from the mid-month reading,” University of Michigan Consumer Survey Director Joanne Hsu said in a statement. “However, consumers remain frustrated about the persistence of high prices and weakening incomes.”
Amid declining consumer sentiment, Kroger doubled down on attracting customers by expanding store hours and improving checkout speeds, service, and stock levels.
“These investments are yielding tangible results, including significant year-over-year reductions in wait times for our customers,” said Sargent.
Kroger also expanded its relationships with third-party delivery providers Instacart, DoorDash, and Uber Eats to improve grocery delivery speeds.
“Orders delivered in two hours or less grew by more than 30%, reflecting the growing demand for immediacy,” Kroger Chief Financial Officer David Kennerley said during the earnings call.
The grocery chain also slashed prices on more than 1,000 items during the third quarter and plans to continue increasing promotions during the holidays to help boost sales.
More Retail:
However, in order to continue to lower prices in stores, Kroger is relying on several bold cost-cutting efforts. For example, in August, Kroger announced its plans to cut nearly 1,000 corporate jobs to “streamline” its organization.
It also announced the closure of three automated fulfillment centers that did not meet operational and financial expectations, which will be closed by the end of January 2026.
In addition, Kroger unveiled plans in June to close roughly 60 underperforming stores across the United States over the next 18 months.
During a recent interview with The Wall Street Journal, Sargent said that savings from these cost-cutting decisions will not only help lower prices in stores, but also keep bakeries, delis, and other store services open longer.
“This would be a good example of taking money from one part of the business and putting it closer to the customer,” Sargent said in the interview.
Kroger’s increased focus on making its prices more affordable for in-store customers comes as more Americans are changing the way they shop, due to worries about rising grocery prices, according to a recent survey by LendingTree.
More or less 61% of Americans cited stress over paying for groceries.
Also, 88% have adjusted their grocery shopping habits as they face higher costs.
Specifically, 44% they said they are buying more generic brands, 38% is sticking to their shopping lists, and 29% they are paying more attention to prices. Source: LendingTree
“It’s understandable that you feel powerless in the face of high prices and interest rates, but there are things you can do to make a difference,” said Matt Schulz, LendingTree’s chief consumer finance analyst, in the survey. “Shopping pays dividends. Using a rewards credit card can put money back in your pocket and help stretch your budget.”
“Using a 0% APR credit card or low-interest personal loan to consolidate debt and get lower interest rates can free up money that can be put toward other goals,” Shulz said. “You can boost your emergency fund with a high-yield savings account.”
Related: Lowe’s announces free offer for customers amid struggles
This story was originally published by TheStreet on December 7, 2025, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.
