Over the past few months, Kroger has seen a slight decline in consumer demand amid recent economic uncertainty and increased competition.
During this year’s third quarter, Kroger saw its like-for-like sales (excluding fuel) rise 2.6% year-over-year, according to its latest earnings report.
However, recent data from market research firm Numerator, which was shared with TheStreet, showed 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 ranks second. Costco falls behind Kroger; however, the storage club is gaining momentum among consumers as it managed to increase its market share to 8.2% during the quarter, up from the 8% it had in the third quarter of last year.
As Kroger fights for consumer dollars amid growing competition, it posted a $1.3 billion loss in the third quarter after its general, operating and administrative expenses jumped 44 percent.
Kroger faces increased competition as it tries to attract price-conscious customers.Jennifer G. Lang / Shutterstock
During a Dec. 4 earnings call, Kroger’s interim CEO Ronald Sargent warned that consumer sentiment has weakened in recent months due to concerns about inflation, a slowing labor market and other factors, which are causing shoppers to continue to pull back on spending, especially when it comes to discretionary purchases.
“I think clients are managing their budgets carefully,” Sargent said. “And they’re making more trips. They’re making smaller trips. The idea of stocking up is waning a little bit. And we’re seeing this economy where high-income premium shoppers continue to spend, while lower-income customers are pulling back more aggressively.”
He said middle-income consumers are increasingly looking for value and signaled that sales in the second half of the third quarter slowed because of the break in SNAP benefits, which quickly resumed after the government shutdown that ended last month.
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“Going forward, I think the consumer will remain cautious,” Sargent said. “I think it will focus more on food and less on discretionary categories.”
In November, consumer sentiment fell significantly as concerns about the economy intensified, particularly during the government shutdown that lasted from October 1st to November 12th.
In November, consumer sentiment he refused of almost 5% since October.
Specifically, sentiment regarding current personal finances and purchasing conditions for durable goods decreased by10% .
Also, only inflationary expectations for the next year (which measures how much consumers expect prices to rise). decreased FROM 4.6% in October at 4.5% in November. Source: University of Michigan
“Following the end of the federal shutdown, sentiment picked up slightly from the mid-month reading,” Joanne Hsu, director of Consumer Studies at the University of Michigan, said in a statement. “However, consumers remain frustrated by persistently high prices and weakening incomes.”
Amid declining consumer sentiment, Kroger doubled down on its ability to attract customers by expanding hours and improving checkout speed, service and inventory levels.
“These investments are delivering tangible results, including significant year-over-year reductions in wait times for our customers,” Sargent said.
Kroger also expanded its relationships with third-party delivery providers Instacart, DoorDash and Uber Eats to improve the speed of grocery delivery.
“Orders delivered in two hours or less increased more than 30%, reflecting growing demand for immediacy,” Kroger Chief Financial Officer David Kennerley said during the earnings call.
The grocery chain also dropped prices on more than 1,000 items during the third quarter and plans to continue ramping up promotions during the holidays to help boost sales.
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However, to continue lowering store prices, Kroger is relying on several bold cost-cutting efforts. For example, in August, Kroger announced plans to cut nearly 1,000 corporate jobs to “simplify” its organization.
It also announced the closure of three automated delivery centers that failed to meet operational and financial expectations, which will close by the end of January 2026.
In addition, Kroger unveiled plans in June to close about 60 underperforming U.S. stores over the next 18 months.
During a recent interview with The Wall Street Journal, Sargent said the savings from these cost-cutting decisions will not only help lower store prices, but also help keep bakeries, delis and other in-store services open longer.
“This would be a good example of taking money out of 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 because of concerns about rising food prices, according to a recent survey from LendingTree.
Approximate 61% of Americans cited stress over paying for groceries.
Also, 88% they have adjusted their shopping habits because they face higher costs.
More accurate, 44% they said they buy more generic brands, 38% they stick to their shopping lists and 29% pay close attention to prices. Source: LendingTree
“It’s understandable to feel helpless in the face of skyrocketing prices and interest rates, but there are things you can do to make a difference,” Matt Schulz, chief consumer finance analyst, LendingTree, said 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 supercharge your emergency fund with a high-yield savings account.”
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This story was originally published by TheStreet on December 7, 2025, where it first appeared in the Retail section. Add TheStreet as a favorite source by clicking here.
