Why Kroger is Trying to be More Like Walmart

Dow Jones
Yesterday

When Red Bull wanted to raise prices on its energy drinks, Kroger booted them from its stores, an unusual move for the Midwestern grocer.

But it's a new day at Kroger, one where it uses hardball moves reminiscent of its giant rival Walmart.

It isn't a coincidence. Greg Foran, who took the helm of Kroger earlier this year, was previously the head of Walmart's U.S. business. He is filling out his team with executives from his former employer and has been moving quickly to implement many of its tactics.

In particular, Kroger is now fixated on offering low prices. The push has meant sweeping cost cuts and tough negotiations with suppliers.

Foran says the changes will help Kroger better compete for cash-strapped shoppers, whose hunt for the best deals have led them elsewhere. The chain needs the shoppers to come back to juice sales after several years of lackluster results and loss in market share.

Yet the new chief executive's hard-charging ways, combined with his hiring of former Walmart executives, have rattled some company veterans who have raised concerns internally.

The company's board of directors has questioned Foran on his campaign for fast changes, according to people familiar with the situation.

Meanwhile, Wall Street has been questioning how much Foran can do with Walmart pushing to lower its prices even further. Walmart plans to invest much of its nearly $3 billion in tariff refunds in reducing prices, some analysts said, a figure that dwarfs Kroger's most recent annual profit.

Kroger "has been losing share to [Walmart] and faces significant competition from other food retailers," Citi retail analyst Paul Lejuez wrote in a recent research note. The firm estimates that Walmart prices are still 5% to 20% lower on average.

The largest pure-play grocer in the U.S. by sales, Kroger was losing a hotly contested fight over groceries to Walmart and other rivals when the supermarket chain plucked Foran to steer a turnaround.

Kroger had failed to broker a merger with competitor Albertsons, and longtime CEO Rodney McMullen left for an undisclosed ethics violation.

One of its biggest problems was pricing. Walmart and discount retailers were luring shoppers-who were reeling from inflation-with lower prices than Kroger's. The discounters offered generally low prices every day, while Kroger stuck with temporary sales on key products, a practice known as high-low pricing.

Kroger's annual profit fell 62% in 2025 from the prior year to $1.01 billion. The company's stock is down about 10% over the past 12 months.

Foran wants Kroger to move away from its high-low pricing roots and more often offer everyday low prices, according to one of the people familiar with the situation, a tactic widely used by Walmart to create the impression of year-round value.

"We have to be relentless on cost," Foran said earlier this month on a call with analysts. "Every dollar we take out is a dollar we can reinvest in areas customers will see."

In June, Foran told investors that he has been to more than 100 of Kroger's roughly 2,700 stores and that less than half were in very good condition. He has said Kroger's revamp is a multiyear effort.

An early riser who starts many mornings with knuckle push-ups and stair climbing, Foran, 65, is often at the office by 6 a.m.

He worked in retail in Australia, then with Walmart in China and as head of its U.S. business, the largest seller of groceries in the U.S. At the giant retailer, Foran would visit stores on Saturdays and give hands-on lessons such as how to examine fruit for freshness.

Foran left Walmart in 2020 and returned to his birthplace to become head of Air New Zealand, before taking the Kroger CEO role in February.

He didn't waste time shuffling his executive ranks, often by bringing in people with Walmart experience. Among the new hires were former Walmart officials Mark Ibbotson and Nate Faust to run operations and e-commerce, respectively.

Foran and his inner circle have talked about jobs for other former Walmart executives at the company and on its board, including Judith McKenna, a former head of Walmart's international division who worked closely with him at the company.

A McKenna nomination to the Kroger board isn't moving forward, according to people familiar with the situation. Walmart typically has a two-year noncompete clause for its former executives.

Under Foran, Kroger bought supermarket chain Giant Eagle this summer for $1.65 billion, a move that will add nearly 200 stores and expand the company's foothold in Ohio, West Virginia, Maryland and Indiana, while adding Pennsylvania.

The grocer has also taken steps to trim costs and use the savings to lower prices. Since last year, Kroger has cut hundreds of corporate jobs and closed dozens of underperforming grocery stores. The company is also trying to negotiate more effectively with its suppliers, said people familiar with the change in strategy.

When Foran took the Kroger job, he was alarmed to learn that its buyers don't collectively negotiate their purchases from large suppliers such as Procter & Gamble or PepsiCo, the people said.

Kroger's managers bargained separately over individual product categories like chips and soda, even if the same company sold both. It is a strategy that hurt Kroger's leverage with suppliers but gave it flexibility to offer targeted sales to shoppers.

The grocer stopped buying Red Bull around the beginning of August, after the energy-drink maker sought to raise its prices while offering a cheaper deal for its drinks to a rival grocer, according to a person familiar with the matter.

Talks between the two companies are still at a standstill, the person said.

Meanwhile, Red Bull displays are gone from Kroger's stores and gas-station shops. Kroger's energy-drink sales have risen over the past four weeks without Red Bull, the person said.

Foran's also trying to improve the grocer's fresh-food selection and the appearance of stores. "The value proposition actually has to get layered in with running better stores and also making sure that our e-commerce offer is hitting where we want," Foran told analysts recently.

Kroger lowered its full-year sales expectations earlier this month, after cash-strapped consumers pulled back on some food spending and the fear of food-borne illness cut into sales near the end of the most recent quarter, the company said.

 

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