After the Automation Retreat: Kroger’s New Playbook Under Greg Foran

Greg Foran arrived at Kroger on February 9 with one of the more distinctive resumes in American grocery. He spent six years running Walmart U.S., where he delivered 20 consecutive quarters of comparable sales growth while overseeing more than 4,600 stores and introducing the digital ordering and pickup infrastructure that became central to Walmart’s competitive position. He then piloted Air New Zealand through the pandemic before Kroger’s board, after nearly a year of searching, named him the grocer’s permanent CEO. His first earnings call as the nation’s largest supermarket operator, held March 5, covered a lot of ground.

The earnings themselves were solid. Kroger reported fourth-quarter fiscal 2025 sales of $34.7 billion, up from $34.3 billion a year earlier, with identical sales excluding fuel increasing 2.4%. Board Chairman Ron Sargent noted that Kroger achieved positive market share gains in the fourth quarter, the company’s best share performance since 2021. For the full fiscal year, identical sales excluding fuel rose 2.9%, double the rate Kroger recorded in fiscal 2024, with adjusted earnings per share of $4.85. The headline that cut against those numbers was a $2.5 billion impairment charge tied to the grocer’s decision to exit several automated fulfillment centers developed through its now-restructured partnership with U.K.-based Ocado, a series of closures that had been building as a strategic inevitability since Kroger first paused the Ocado rollout in 2023.

The Fulfillment Shift That Preceded Foran

To understand where Kroger’s digital business is heading, it helps to understand what was unwound before Foran arrived. The Ocado partnership, which Kroger launched in 2018 under then-CEO Rodney McMullen, envisioned a network of large robotic customer fulfillment centers across the U.S. As of early 2025, Ocado still anticipated opening two new centers with Kroger in fiscal 2026. By November 2025, the math had changed: Kroger announced it would close three automated facilities in Pleasant Prairie, Wisconsin; Frederick, Maryland; and Groveland, Florida in January 2026, and later canceled plans for a Charlotte, North Carolina facility, paying Ocado $350 million in connection with those decisions, according to Supply Chain Dive reporting from November and December 2025. The total impairment and related charges came to $2.6 billion.

The case for closing those facilities rested on cost economics: in-store fulfillment, combined with expanded third-party delivery partnerships, could serve online customers at lower cost than large standalone robotic warehouses, particularly outside the highest-density markets. Interim CEO Ron Sargent described it as a “comprehensive review” of the automated fulfillment network during the company’s third-quarter earnings call in December 2025, and the review pointed toward a hybrid model. That review was expected to deliver $400 million in e-commerce operating profit improvement in 2026, Kroger disclosed in its November 2025 announcement.

That pivot is now the foundation Foran is building on, and it connects to what he described on the March 5 call as a “long runway to accelerate growth.” Adjusted digital sales grew 20% in the fourth quarter, completing seven consecutive quarters of double-digit growth and making e-commerce a $16 billion annual business for Kroger. The company expects digital operations to reach profitability in the first half of 2026, tightening the timeline Sargent had outlined in December. CFO David Kennerley said fulfilling more orders from stores and deepening third-party delivery ties are the primary mechanisms for lowering e-commerce costs.

The Third-Party Equation

The specific partnerships Kroger has assembled are worth examining. Sargent said on the earnings call that expanded relationships with DoorDash and Uber Eats have so far exceeded the company’s expectations, and that Kroger’s convenience offerings, which operate in conjunction with Instacart, are projected to generate more than $1.5 billion in sales in 2026. Those relationships, Sargent said, “extended our reach to customers and shopping occasions we wouldn’t otherwise capture.”

For CPG brands managing their Kroger commercial strategy, the fulfillment configuration carries a specific implication. Kroger’s official announcement of its expanded Uber Eats partnership, filed with the SEC in fall 2025, noted that increased customer traffic through third-party platforms would fuel Kroger Precision Marketing’s growth by “creating new opportunities for CPGs to reach and engage customers with relevant advertising” — meaning the delivery expansion simultaneously widens the first-party data loops that power KPM’s media product. Foran made that connection explicit on the earnings call, describing the media business as “closely tied to this e-commerce momentum.”

Media, Data, and the Reorganized KPM

Kroger’s alternative profit businesses, which include media, Kroger Personal Finance, and Insights, delivered $1.5 billion in operating profit in fiscal 2025, according to the company’s earnings release. Kennerley told investors he expects the media business specifically to deliver double-digit growth in 2026. That media business is Kroger Precision Marketing, which draws on the purchase data generated by Kroger’s loyalty program, described in KPM’s own published program documentation as covering tens of millions of households across the grocer’s banner network.

The organizational structure behind KPM changed in a meaningful way in mid-2025. In August, Kroger unified its retail media team at 84.51° with consumer insights and loyalty marketing services under a single operation, as Digital Commerce 360 reported. Milen Mahadevan, president and CEO of 84.51°, described the move as eliminating friction between functions. Christine Foster, named senior vice president of strategy and operations for KPM, framed the reorganization as a shift toward helping brands translate purchase data into decisions “across every part of their organization,” not just media performance.

That consolidated structure has since been extended into the streaming environment. In September 2025, KPM added managed-service capabilities for programmatic audio, connected TV, and dynamic creative optimization, specifically aimed at mid-sized CPG companies that lack dedicated programmatic teams, as Grocery Dive reported. The managed-service layer addresses a real operational gap for that segment: brands with meaningful Kroger distribution that want to apply first-party purchase data to streaming and audio campaigns without building the internal activation capacity to do it.

Private Label and the Brand Calculus

Sargent told investors that Kroger introduced more than 1,100 private label products in fiscal 2025, up from approximately 900 in the prior year. That acceleration sits against a measurable shift in consumer perception. Circana’s U.S. CPG Private Label Story report, referenced in Food Business News reporting from March 2025, found that 69% of consumers now view private brands as similar or superior to national brands in quality. Kroger’s Simple Truth and Private Selection brands led its own-brand growth in the fourth quarter, Sargent said, with health-focused items representing a significant portion of the new introductions.

Sargent was deliberate in framing private label as a parallel strength, not a displacement strategy. “This is not a zero-sum game,” he said. “At Kroger, we’re playing to our strengths, whether it’s fresh categories or Our Brands or deep first-party data.” For CPG brand managers, the practical question is less about Kroger’s framing and more about category math: shelf space and shopper attention are finite, and a private label portfolio growing at 1,100 new items per year does shift the competitive surface, particularly in the health and premium segments where Simple Truth and Private Selection are most active.

Capital Deployment and Store Strategy

Kroger plans to spend between $3.8 billion and $4 billion in capital expenditures in 2026, with new store openings and remodels as the primary uses, Kennerley said. The company completed 29 major store projects in fiscal 2025 and expects to increase new store openings by 30% in 2026. Sargent said the expansion will include entry into Jacksonville and Kansas City, two new regions for the Kroger banner. This follows Kroger’s decision during fiscal 2024 to close roughly 60 underperforming stores, a pruning exercise that gives the capital program a cleaner portfolio to build from.

The store investment strategy is where Foran’s background becomes most directly relevant. His years at Walmart U.S. centered on using the brick-and-mortar footprint as a competitive asset across both physical retail and digital fulfillment. Kroger’s Grocery Dive profile on Foran’s appointment noted that he is credited with integrating online and in-store operations at Walmart to improve fulfillment speed. At Kroger, the logic compounds: stores functioning as fulfillment hubs generate the order density that makes third-party delivery partnerships profitable and the customer transaction data that feeds KPM.

Kennerley said Kroger is also piloting new store formats and evaluating new concepts as part of what the company described as “fresh thinking” on the in-store experience. Beyond the physical footprint, Kroger plans to expand an agentic AI shopping tool across more of its divisions, designed to help customers build baskets, discover products, plan meals, and stay within budgets. On the supply chain side, the company is pursuing added automation and expanded capacity, Kennerley said.

Foran’s 2026 guidance reflects a company investing ahead of growth. Kennerley told investors to expect identical sales growth excluding fuel of 1% to 2% for the year, with first-quarter results near the bottom of that range in part because of declining egg prices. Adjusted FIFO operating profit is expected to come in between $5.0 billion and $5.2 billion, with adjusted EPS in the range of $5.10 to $5.30. Kennerley described that guidance as reflecting Kroger’s ability to invest more aggressively in customer value while improving gross margins, funded by e-commerce reaching profitability, procurement efficiencies, and productivity gains across the business.

The Kroger Global Capability Center, a new internal unit announced during the call, is designed to streamline decision-making and accelerate execution across the organization, Kennerley said. The company expects modest benefits in 2026, with more substantial operating returns in 2027 and 2028. Foran has been in the role for roughly a month. He told investors he spent that time visiting stores, distribution centers, and manufacturing facilities and watching how customers shop. The priorities he outlined on March 5 reflect what he found: a business with real operational momentum that needs faster execution at every level to translate that momentum into share.

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