Kroger will be closing more than 60 stores it considers underperforming across the U.S. by the end of 2026, according to a recent announcement by the grocery chain.
The news was part of Kroger’s first-quarter earnings report, which was released on Friday. It states that the closures are expected to provide the company a “modest financial benefit.”
“In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closing of approximately 60 stores over the next 18 months. As a result of these store closures, Kroger expects a modest financial benefit,” the company said in the report.
Kroger said it aims to reinvest the money it saves through the closing into improving its customer experience at other stores.
“Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance,” the company said.
The report was also clear to mention that none of the forthcoming changes signal a need for layoffs. Employees at the affected stores will be offered roles in other stores, according to the report.
The company’s first-quarter earnings fell to $866 million, down from $962 million during the same quarter last year. Its total sales were also down, from $45.3 billion last year to $45.1 billion this year.
Despite the first quarter losses, the company still increased its full-year earnings forecast to between 2.25 percent and 2.35 percent growth. The chain said that demand for its fresh food, store branded products, and its digital services is strong and will likely remain so throughout the year.
While the company is closing stores by the end of next year, it also announced plans to open around 30 new stores by the end of this year.
Kroger operates nearly 2,800 stores in the U.S. under the name Kroger as well as Ralphs, King Soopers, Fredy Meyer and Harris Teeter.
The company is currently in the process of selecting a new CEO after its previous CEO, Rodney McMullen, resigned in March amid an internal ethics investigation.
