The U.S. economy continues to send mixed signals. On one hand, unemployment remains low and inflation has eased compared to previous years. However, many families are still struggling to make ends meet.
In this context of uncertainty, supermarket chain Kroger has announced the closure of 60 stores over the next 18 months. This decision is surprising at a time when consumers are turning to supermarkets more than ever to save on their purchases. Although some competitors are choosing to open more locations, Kroger is pursuing an opposite strategy.
An unexpected measure amid high food demand
The cumulative inflation since 2021 has made basic products more expensive and changed the consumption habits of millions of people. Eating out has become a real top-level, so many are choosing to cook at home and stock their pantries with food bought at supermarkets. This situation has benefited the sector, which has seen an increase in customer traffic seeking more affordable prices.
Even so, Kroger has decided to reduce its presence in several parts of the country by closing stores considered unprofitable. According to the company, this decision is part of a plan to restructure its store network and free up resources. The goal is to invest in modernizing other locations and improving the customer experience.
Headquartered in Cincinnati, Kroger currently has more than 2,700 supermarkets across 35 states, according to The Street. The 60 stores that will close represent a small portion of the total, but the impact on local communities could be significant. This is especially true if these areas don't have nearby alternatives.
A risky move amid a possible price increase
The short-term outlook isn't very encouraging for U.S. consumers, as the end of the current pause on import tariffs is expected. This could lead to a new increase in the price of food and essential products. In this scenario, supermarkets will be more important than ever as sources of affordable supplies.
While some chains like Aldi plan to open 225 new stores before the end of the year, Kroger, meanwhile, has chosen to focus its efforts on internal efficiency. In addition to renovating locations, the company wants to strengthen its private label product offerings. This could attract customers looking to save without sacrificing quality.
However, closing locations could be a risky move if demand continues to grow. Kroger could lose ground to competitors with a broader network. For now, the company hasn't specified which stores will be affected, so consumers will need to stay alert for future announcements from the company.