Kroger has kicked off a physical store expansion program, beginning with the completion of four major store projects and groundbreaking for 14 locations in its Q4, which ends in February 2026. The supermarket giant expects to increase new store builds by 30% in FY 2026.
“Earlier this quarter, we announced expansion plans for Harris Teeter, one of our strongest and most successful banners,” said Ron Sargent, Interim CEO at Kroger, during a conference call discussing Q3 financial results. “These plans include opening additional new stores in the Southeast and entering Jacksonville, Fla., which is an important adjacent geography that positions us to grow households and gain share.
“Looking ahead, we plan to accelerate capital investment in new stores beyond 2025 to strengthen our competitive position, expand into high-potential geographies and support long-term growth,” Sargent added.
Shift in Ecommerce Fulfillment Strategy
Kroger also has initiated a shift in its ecommerce operations to a hybrid fulfillment model, using “automated fulfillment in geographies where customer demand supports it and also leveraging store-based fulfillment through our pickup business and relationships with well-established third-party delivery partners,” said Sargent.
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Last month the retailer closed three automated fulfilment centers operated by Ocado, in Wisconsin, Maryland and Florida, and now Kroger will reportedly pay Ocado $350 million in compensation charges for cancelling the contracts for two additional fulfillment centers that had been scheduled to launch in 2026.
“With more fulfillment occurring in stores, we recently expanded our relationships with third-party delivery providers Instacart, DoorDash and Uber Eats,” noted Sargent. “By using our store network, we’re improving both geographic coverage and speed, with delivery in as little as 30 minutes.
“This refreshed hybrid model helps us attract new customers, improve delivery speeds and leverages our growing store network,” Sargent added. “We expect these decisions to contribute approximately $400 million in ecommerce profitability improvements in 2026, making our ecommerce business profitable in 2026.”
For its Q3, which ended Nov. 8, 2025, Kroger’s total sales were $33.9 billion, up from $33.6 billion during the same period in FY 2024. Excluding fuel and Kroger Specialty Pharmacy, sales increased 2.6% compared to last year.
