US supermarket Chain Kroger is Set to Close 60 Stores in Next 18 Months

US supermarket chain Kroger intends to shut down around 5% of its stores, equating to roughly 60 locations, over the next 18 months.

The closures come just a few months after talks for a mega-merger with rival Albertsons fell through. As a result, the two corporations became involved in a legal battle.

According to Kroger’s earnings report on Friday, the company is facing a $100 million impairment charge due to the store closures, but it’s expected to bring a modest financial benefit in the long term. However, the firm has not yet disclosed which stores will be closed, and their statement ended with the earnings announcement.

Kroger claimed that employees affected by the closures will be offered opportunities in adjacent shops, and the savings will be used to improve the customer experience at the company’s remaining sites. Kroger runs more than 1,200 stores across 16 US states.

The grocery company claimed that it is benefiting from consumers’ less dining out, and it updated its revenue prediction for the year to be higher. Interim CEO Ron Sargent said on an earnings call that its consumers are having more meals at home.

Also Read: Frederick Smith, Fedex Founder and Former CEO, Dies Aged 80

According to Kroger, sales were also boosted by price cuts on 2,000 products and a stronger advertising push for its private labels, which are frequently less expensive than major brands. According to Sargent, sales of these private label products have risen faster than those of national brands for seven consecutive quarters. Kroger intends to launch 80 new protein-rich items in the coming months to capitalise on consumers’ growing demand for this vitamin.

Regarding the closures, Sargent noted that “not all of our stores are delivering the sustainable results we need” and that the company did not examine its sites during the merger process, as it does every year.

Sargent was appointed interim CEO in March following the abrupt resignation of Kroger’s former CEO, Rodney McMullen, after an investigation into his personal conduct.