Kroger Slashes Sales Growth Outlook as Strained Consumers Pivot to Essentials

A challenging macro environment and other issues affecting the grocery industry led Kroger to lower its 2026 full-year guidance for identical sales without fuel, executives said Friday (Sept. 11) during a second quarter earnings call. Kroger lowered its guidance for identical sales without fuel to 0.2% to 0.8%, down from the guidance of 1.0% to 2.0% the company announced in June, according to an earnings release presentation released Friday. Kroger updated that guidance after a second quarter in which identical sales without fuel increased 0.2%. That figure was down from the 3.4% growth Kroger saw during the second quarter of 2025, the company said in a Friday press release. The company’s second quarter ended Aug. 15, per the release. Kroger operates across the United States with a dozen banners, including Fred Meyer, Ralphs and Harris Teeter, according to its website. During Friday’s earnings call, Kroger CEO Greg Foran said that while the retail saw traffic increase during the second quarter, the macro environment remained challenging. “Customers remained under pressure, and that has affected the industry broadly,” Foran said. “Unit growth has slowed since the start of the year. Reductions in SNAP benefits, higher fuel prices and softer consumer confidence are all putting pressure on household budgets. Customers are buying more on need.” Kroger Executive Vice President and Chief Financial Officer David Kennerley said during the call that second-quarter sales were softer than the company had expected. Impacts from the Inflation Reduction Act created a 140-basis-point headwind to identical sales without fuel, an ongoing shift from brand to generic prescriptions reduced sales by 60 basis points, the cyclospora outbreak lowered produce sales by 35 basis points and egg deflation created another 30-basis-point headwind, Kennerley said. The Inflation Reduction Act lowered drug prices in the pharmacy business, Foran said. Together, these represented a 265-basis-point drag on identical sales without fuel during the second quarter, Kennerley said. “In terms of units, grocery units decelerated slightly compared to the first quarter, driven by many of the factors Greg covered earlier,” Kennerley said. “This was partially offset by overall food inflation, which was modestly higher than the first quarter.” Kroger’s first-half results, together with pressures that will remain through the end of the year, are reflected in the company’s updated guidance for full-year identical sales without fuel, Kennerley said. “In the opening weeks of the third quarter, we continue to see lingering impacts from cyclospora,” Kennerley said. “Trends are improving, but we have taken a cautious view of how long the impact may last, and our outlook assumes some headwinds to sales without fuel in the quarter.”