Kroger lifts annual sales target on resilient grocery demand

This file photo shows bagged purchases from the Kroger grocery store. (AP Photo/Rogelio V. Solis, File)

Kroger bumped up its annual same-store sales forecast on Friday, betting on strong grocery demand to offset reduced discretionary spending as American consumers grapple with tariff-driven economic uncertainty.

U.S. President Donald Trump’s sweeping tariff policy has rattled global markets, raising fears of persistent inflation in the United States due to impending price hikes on imported goods.

Most other retailers have either lowered or withdrawn their financial targets for the year.

While Kroger raised its target for full-year 2025 identical sales growth to 2.25 to 3.25 per cent, from two to three per cent expected earlier, the company maintained its annual profit forecast, with new CFO David Kennerley noting in a statement that the macroeconomic environment remained uncertain.

Bellwether Walmart also maintained its annual profit forecast, while Target cut its sales guidance for the year.

Kroger has invested in sprucing up its curbside pickups as well as its more affordable private label brands as it battles stiff competition from Walmart.

It has also benefited from an uptick in its pharmacy business, driven by the popularity of GLP-1 weight-loss drugs.

Kroger’s top brass has undergone a shakeup in recent months, with longtime CEO Rodney McMullen resigning following an investigation into his personal conduct.

Kennerley, a former PepsiCo executive, also began his tenure as finance chief at the grocer in April.

Kroger reported a first-quarter identical sales growth of 3.2 per cent, beating analysts’ average expectation of 2.4 per cent, according to estimates compiled by LSEG.

The grocer’s gross margin was 23 per cent of sales for the quarter ended May 24, compared with 22 per cent a year ago.

Its shares were down marginally in premarket trading. They have risen about seven per cent so far this year.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Pooja Desai)