Walmart Is Eating Kroger Alive. Here’s What Kroger Must Do Now

Walmart’s Grocery Delivery is now officially profitable, and the rest of Retail knows they have a problem.  

After Kroger’s failed merger with Albertsons, and their deep investment in e-grocery, Kroger may have the biggest problem of them all.  

Here’s what Kroger must do - quickly - in order to survive.  

Now any Retailer has to nail at least one of four value propositions.

Convenience, Value, Community, or Experience.

(Just ask Sears, JC Penny, Belk, or Clover.)

But that value proposition must also must be strong enough to win out over a competitors.

If a retailer competes on Value, their Value must be strong enough to win out over a Competitor’s Experience, or Convenience, or Community.

If a retailer competes on Experience, their Experience must be unique enough to win out over a competitor’s Value, or Convenience, or Community.  

Unless of course you can compete on more than one.  

Walmart, for one, was built on Value.  Or was it experience?

After all, a hyperstore (complete with fast food) is a mall of sorts.  

Now add fast home delivery and an honestly pretty cool app.

Value + Convenience + Experience (at least for some).

Walmart is becoming everything Kroger wanted, but failed to become.

Remember, Kroger partnered with Ocado back in 2018.

The plan was to be the World leader in e-grocery.

But Q1 2025 painted a different story.

After their failed merger with Albertsons, they’re seeing slightly declining sales, slightly declining net income, and still-unprofitable grocery delivery.

And all of that amidst the growing Walmarts and Costcos and Amazons.

(And Aldi’s and Sprouts and Trader Joe’s.)

Here’s what Kroger needs to do quickly, in order to survive in the Age of Walmart:

𝟭. Scale their E-grocery.  

- Profitability will only come with scale, eg, Walmart.

- More orders, longer delivery ranges, more modes of delivery, etc.

𝟮. 𝗥𝗲𝘁𝘂𝗿𝗻 𝗙𝗼𝗰𝘂𝘀 𝘁𝗼 𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗲𝗱 𝗙𝗖’𝘀.

- Kroger hasn’t opened or converted an automated Fulfillment Center since ‘23.

- Unfortunately, it has even closed a couple.

- Automation is the only answer for profitable delivery.

𝟯. 𝗗𝗼𝘂𝗯𝗹𝗲 𝗱𝗼𝘄𝗻 𝗼𝗻 𝗥𝗲𝘁𝗮𝗶𝗹 𝗠𝗲𝗱𝗶𝗮.

- Kroger’s RM - 84.51 - hasn’t seen much innovation lately.

- RM’s have become cash cows, and important reinvestment vehicles for retailers.

- They need to focus on partnerships between their Retail Media Arm, and Agencies and CPG’s.  

𝟰. 𝗠𝗼𝗿𝗲 𝗮𝗻𝗱 𝗯𝗲𝘁𝘁𝗲𝗿 Tech 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽𝘀.

- Walmart’s grocery tech model: Partner, then acquire.

- Tech moves too quickly to develop it internally.

𝟱. 𝗨𝗻𝗳*** 𝘁𝗵𝗲 𝗞𝗿𝗼𝗴𝗲𝗿 𝗔𝗽𝗽.

- Kroger’s app lags far behind Walmart, Sam’s, Target, etc.

- Grocer Apps have become lifestyle apps in some cases.

- When in doubt, gamify it.  All of it.

Whatever Kroger does, they better do it quickly.

Walmart is the only retailer that has stopped the e-grocery capital bleed, and their ability to reinvest is only growing.

And if you’re still claiming, “Walmart doesn’t compete against Kroger”, I might think again.  Walmart is competing against virtually every retailer.

Their growth plans this year alone:

- 150 ‘Stores of the Future’.

- 50 new store locations.

- 45 new c-store.

- Dark stores.

Walmart is here for ALL of the Retail.

What do you think?

Have you used the Walmart App?

Which Retailers win long term?

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We drive velocity in Sprouts, Whole Foods, Walmart, Target, Walgreens, CVS, Kroger, Sam's, COSTCO, and lots of other retailers.

We grow brands on Amazon.