Kroger — Business Overview
What does Kroger do?
Kroger is one of the largest supermarket operators in the United States, running nearly 2,700 grocery stores under a variety of regional brand names. Founded in 1883, Kroger operates 2,697 supermarkets across 35 states and the District of Columbia under local banner names, 2,250 of which include a pharmacy and 1,731 of which include a fuel center. The stores serve roughly 63 million households annually and employ more than 403,000 people.
Beyond traditional grocery retail, Kroger has built meaningful adjacent businesses around its store traffic and customer data. These include a large private-label (store brand) portfolio called Our Brands, which generated over $39 billion in sales in fiscal 2025, as well as a fast-growing retail media business called Kroger Precision Marketing and eCommerce capabilities spanning pickup, delivery, and third-party platforms available at 2,408 locations.
How does Kroger make money?
The core revenue engine is straightforward: sell groceries, pharmacy products, and fuel at prices above the cost to procure and deliver them. The vast majority of Kroger's revenue comes from customers buying products in stores or through its digital channels. Fuel sales are called out specifically as an important part of revenue, net earnings, and customer loyalty.
A growing second revenue stream comes from what Kroger calls its "alternative profit" businesses — primarily retail media and data analytics. Kroger Precision Marketing sells targeted advertising to consumer-packaged goods brands and other partners, using purchase data from over 95% of transactions (all linked to a Kroger loyalty card). This business carries a notably higher margin than traditional grocery operations. Kroger also monetizes its data through analytics services via its subsidiary 84.51°.
Our Brands (private-label products) serve as both a revenue and margin driver within the core grocery business. With over 13,000 private-label items stocked on average per store and 33 company-owned food production plants, Kroger captures more of the margin on these items than it does on national brands. Our Brands are sold across four tiers: Private Selection (premium), Kroger brand (mainstream), Smart Way (value), and Simple Truth (natural and organic).
What market does Kroger operate in?
Kroger competes in the U.S. grocery retail industry, one of the largest consumer spending categories in the country. Grocery is a generally mature, low-margin, high-volume business. Demand is relatively stable since food is a necessity, and revenues are largely non-seasonal, though they pick up during major holidays and weather events.
Two significant secular trends are reshaping the industry. First, eCommerce in grocery is growing, with customers increasingly expecting pickup and delivery options — Kroger has been investing heavily here. Second, retail media is emerging as a high-margin revenue layer for large retailers with rich customer data, and Kroger is positioning itself as a major player in that space alongside the likes of Amazon and Walmart.
Who are Kroger's main competitors?
The grocery retail industry is competitive and includes a wide range of formats — traditional supermarkets, discount chains, warehouse clubs, and online players. While the filing directs detailed competitive discussion to Item 1A, Kroger's positioning gives some clues: it competes on value, convenience, fresh product quality, private-label breadth, and personalization powered by loyalty data.
Kroger's claimed advantages center on the scale and depth of its customer data. With over 20 years of investment in data science through 84.51°, and more than 95% of transactions tied to loyalty cards, Kroger argues it can offer more precise personalization and advertising measurement than most competitors. Its Our Brands portfolio — at over $39 billion in sales — provides a product differentiation and margin edge over retailers with thinner private-label offerings.
The industry is a mix of large national players and strong regional operators. Broad competitors include Walmart (the largest U.S. grocery seller), Amazon (via Whole Foods and online grocery), Costco, Target, Albertsons, and regional chains. The landscape is competitive and fragmented at the local level, though national scale increasingly matters for technology investment and supply chain leverage.
Where does Kroger operate?
Kroger is a U.S.-only business, with stores spread across 35 states and the District of Columbia. The filing does not report a meaningful international footprint — Kroger's operations in manufacturing, selling, and distribution are all domestic.
The store network is intentionally run under local banner names to preserve regional brand loyalty. Examples include Harris Teeter, Ralphs, King Soopers, Fry's, and City Market, among others. This multi-banner strategy means customers in different regions may shop at a Kroger-owned store without recognizing it as Kroger. Approximately 51% of its supermarkets are in company-owned buildings.
Manufacturing is also U.S.-based, through 33 food production plants covering dairies, deli and bakery facilities, beverage plants, and more. About 20% of Our Brands units are produced in these owned plants; the rest are made by outside manufacturers to Kroger's specifications.