Kroger Warns of Rising Inflation but Maintains Forecasts as Consumers Rein in Spending
By Reuters | 18 Jun, 2026

The leading US supermarkets operator Kroger stuck to its annual forecasts but warned of rising inflationary pressure causing consumers to trade down to lower grocery bills.

U.S. supermarket-chain operator Kroger stuck to its annual forecasts on Thursday but warned of rising inflationary pressure in the back half of the year, sending its shares down about 8% in premarket trading.

The Cincinnati, Ohio-based grocer joined key rivals like Walmart in highlighting cautious consumer behavior, reflecting broader U.S. retail trends as shoppers trade down amid cost-of-living pressures.

U.S. consumer inflation rose at its fastest pace in three years in May, with grocery prices edging higher, led by increases in nonalcoholic beverages, cereals, bakery products, fruit ​and vegetables.

Kroger continues to expect fiscal 2026 identical sales, without fuel, to rise 1% to 2%, and earnings to be in the range of $5.10 to $5.30 per share.

"Customers are being more deliberate with their spending and at times, shopping us selectively. We're getting too many promotional trips and not enough of the full basket," CEO Greg Foran, who took the helm earlier this year, said in a statement.

Food-at-home growth slowed by about 100 basis points from the previous quarter, he said.

To regain market share from rivals like Walmart and Costco, which provide groceries at lower price points, Kroger has planned price cuts on thousands of items, funded partly by direct imports and better use of technology.

"The value war seems to be escalating as companies like Kroger are leaning harder into price to defend share and drive traffic," said Arun Sundaram, analyst with CFRA Research.

Kroger has been investing in private-label brands, promotions, new stores and digital capabilities to drive traffic, but the impact of higher fuel sales, transportation costs and spending weighed on its margins.

Its quarterly gross margin came in at 22.7% of sales compared with 23% a year ago.

Kroger posted quarterly adjusted profit of $1.58 per share versus an estimate of $1.59 per share, according to data compiled by LSEG.

Its quarterly sales of $46.12 billion beat an estimate of $45.47 billion.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Pooja Desai)