Kroger to close 60 stores nationwide over the next 18 months, the company confirmed Thursday in its first-quarter 2025 earnings release. The move is part of a strategic shift aimed at streamlining operations and reinvesting in higher-performing business areas.
The closures will allow the grocery giant to reallocate capital toward digital expansion, pharmacy growth, and fresh food innovation—all central pillars of its growth strategy.
Closures Come With $100 Million Impairment Charge
Kroger to close 60 stores that underperform financially, resulting in a $100 million impairment charge for the quarter. However, the company expects modest long-term benefits and says the closures won’t affect its full-year outlook.
All employees affected will be offered positions at nearby Kroger locations, executives said.
“Kroger delivered a strong first quarter,” said CEO Ron Sargent. “We’re focusing our resources on delivering a better customer experience and streamlining store operations.”
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Kroger to Close 60 Stores Without Changing 2025 Outlook
Despite the announcement that Kroger plans to close 60 stores, the company increased its identical sales without fuel guidance to a new range of 2.25% to 3.25%.
CFO David Kennerley cited solid sales and execution across categories as the reason for the boost.
“Our fresh-focused strategy, supported by Our Brands and digital growth, continues to resonate with shoppers,” Kennerley said.
Excluding fuel and other one-time adjustments, comparable sales rose 3.7% from the prior year.
Margins Grow Amid Store Closures and Divestitures
The decision for Kroger to close 60 stores comes as gross margin improved to 23.0%, up from 22.0% a year ago. Supply chain savings, the sale of Kroger Specialty Pharmacy, and reduced shrinkage helped offset lower pharmacy margins.
Operating costs rose slightly due to a pension plan contribution; however, improved productivity mitigated the impact.
Kroger’s net debt-to-adjusted EBITDA ratio rose to 1.69, still within the target range.
Kroger to Close 60 Stores as Retail Landscape Shifts
Kroger to close 60 stores during a period when grocers across the U.S. are trimming underperforming locations and investing more heavily in automation, digital, and high-margin segments.
“This is a strategic realignment,” said Sargent. “We’ll continue to serve our customers better, support our associates, and build long-term value for shareholders.”