The Kroger Co.
The Kroger Co. operates as a food and drug retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and its multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company's marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and its price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through its fuel centers. The company sells its products through its stores, fuel centers, and online platforms. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.
What does it do?
Kroger is one of America's biggest grocery chains — think supermarkets where you buy your weekly food shop. They run over 2,700 stores under names like Kroger, Fred Meyer, Harris Teeter, and King Soopers. Beyond groceries, many of their stores also have pharmacies, fuel stations, and even clothing sections. If you've ever shopped at a large supermarket in the US that wasn't Walmart or Costco, there's a good chance it was a Kroger-owned store.
Kroger is one of the last major independent grocery giants standing at a time when the entire supermarket industry is consolidating — meaning big players are merging to compete with Walmart and Amazon. With $147.6 billion in annual revenue, it's a bellwether for how everyday American consumers are spending on food, which makes it closely watched during periods of inflation or economic stress. Investors in defensive stocks — companies that tend to hold up even when the economy slows — pay close attention to Kroger because people always need to eat.
How does it make money?
Kroger makes the vast majority of its money by selling food, household goods, and pharmacy products through its physical stores — $147.6 billion worth last year. But the higher-margin (more profitable) parts of the business are its private-label brands like Simple Truth, its growing digital and delivery operation, and its data-driven advertising business called Kroger Precision Marketing, which sells targeted ads to food brands using shopping data. Fuel sales at its gas stations also add a meaningful revenue stream. Revenue barely grew year-over-year — from $147.1 billion to $147.6 billion — which shows the business is stable but not rapidly expanding.
Why do investors care?
The investment case for Kroger is about steady, reliable cash generation in a business that doesn't disappear during recessions — groceries are non-negotiable spending. Kroger has been aggressively building out its digital and delivery capabilities to fend off Amazon Fresh and Walmart+, and its advertising data business could become a high-margin revenue stream that the market isn't fully pricing in yet. For the thesis to work, Kroger needs to keep customers loyal, grow its own-brand product margins, and prove its tech investments are paying off. It also needs to navigate thin profit margins — net income of just $1 billion on $147.6 billion in sales means there's very little room for error.
Deep Dive
MemberA full investor briefing on The Kroger Co. — history, leadership, risks, and outlook.