U.S. grocery store giant Kroger announced that it will close nearly 60 of its locations across the country by the end of 2026.
According to a report from The Independent, Kroger will close approximately 60 stores it deems underperforming over the next 18 months, the company revealed late last Friday in its first-quarter earnings report.
The store closures are expected to generate a “modest financial benefit” and are part of the grocery chain’s broader realignment strategy.
“In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closing of approximately 60 stores over the next 18 months. As a result of these store closures, Kroger expects a modest financial benefit,” the company stated.
Kroger stressed it does not anticipate layoffs as part of the transition. Employees working at the affected locations will be given opportunities to transfer to other stores within the company.
“Employees at the affected stores will be offered roles in other stores,” the report said.
The closures come as Kroger reported declining first-quarter earnings and revenue. Net income fell to $866 million from $962 million in the same quarter a year ago, while total sales dipped slightly to $45.1 billion, down from $45.3 billion during the same quarter last year.
According to the report, company leadership remains optimistic about the remainder of the fiscal year.
The retailer raised its full-year earnings growth forecast to between 2.25% and 2.35%, attributing the boost to continued strength in its fresh food segment, private-label products, and expanding digital services.
“Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance,” the company said.
Despite the closure of underperforming stores, Kroger plans to open around 30 new stores by the end of 2025.
The company currently operates nearly 2,800 locations nationwide under several brand names, including Kroger, Ralphs, King Soopers, Fred Meyer, and Harris Teeter.
Leadership changes are also underway at the company. Kroger is selecting a new chief executive officer after former CEO Rodney McMullen resigned in March amid an internal ethics investigation.