Kroger makes a pricing move Costco and Walmart will love
It costs 14.8% more to shop at Kroger than to buy the same items at Walmart, and Costco‘s prices for those items are 21.8% cheaper than Walmart’s, according to a study commissioned by Consumer Reports.
Even the Kroger-owned discount brands King Soopers (7.9%) and Food for Less (9%) come in with higher prices than the Walmart baseline, while many of the chains it operates actually have higher prices than Kroger itself.
Price, of course, isn’t the only factor consumers consider when picking a grocery store, but traditional supermarket chains have lost sales to rivals including warehouse clubs, and department store chains like Walmart and Target, which also offer groceries.
“In an effort to fulfill their unique definitions of value, consumers visit more than five separate grocery store banners on average per month despite growing omnichannel grocery shopping trends,” FMI CEO Leslie G. Sarasin said in The Food Industry Association’s (FMI) U.S. Grocery Shopper Trends 2026 report, which was released in May.
Value isn’t the same as price, but price does matter for many cash-strapped Americans. That leaves new Kroger CEO Gregory Foran walking a narrow tightrope as he has openly said that his company won’t be the lowest-priced option, while also admitting that its prices are too high.
Kroger CEO admits need to lower prices
Foran spent his first 100 days in spending time in his chain’s stores and came to his first earnings call as the CEO with some observations.
“Over time, our promotions have gotten too complicated, and our price position has not kept pace where it needed to,” he said during Kroger’s first-quarter earnings call.
His feelings on price, however, focused on lowering the gap between Kroger’s various nameplates and their rivals.
“Let me be clear on what this means. We do not need to be the lowest-priced retailer. We need to be more competitive, more consistent and easier for customers to understand,” he added.
In reality, Kroger does not have the same buying power as Walmart and Costco, because it’s dwarfed by Walmart in sales, something it called out in a court filing, and Costco has nearly double the sales on far fewer products.
- Walmart: $706.4 billion (Walmart’s 2026 Q4 report)
- Costco: $269.9 billion (Costco’s Q4 earnings report)
- Kroger: $147.6 billion (Kroger’s Q4 earnings report)
Costco warehouses carry about 4,000 products compared to the 30-40,000 found at most supermarkets, according to the warehouse club’s website.
Kroger admitted that it can’t compete with Walmart and Costco on price in its reaction to the Federal Trade Commission denying its merger with Albertsons in 2024.
“This decision only strengthens larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry,” the company shared in a press release.
Kroger CEO wants to improve value
Foran wants to focus on lowering prices, but he understands that Kroger has to deliver for its customers in other ways.
“When a customer is deciding where to shop, we want more of them choosing Kroger more often because the value is clear, the experience is great, and the trust is there,” he said.
He believes the company has to find ways to cut costs in order to lower prices.
“Every dollar we invest in customer value we earn through cost savings and efficiency. That’s the standard we’re holding ourselves to,” he added.
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The company, he shared, will also have to use every tool to keep prices down.
“On cost of goods, we will press harder on supplier negotiations and lean further into direct sourcing,” Foran declared.
“On goods not for resale, we will remove complexity and waste in addition to buying better, and we need to operate more efficiently. That means fewer organizational layers, smarter ways of working, standing up our Kroger capability center and applying AI across the business.”
Kroger
Kroger is fighting the economy
Americans spend on average $169 per week on groceries as of February 2026, according to FMI’s U.S. Grocery Shopper Trends 2026 report.
A considerable amount of Americans, 40%, are looking to save money on food overall, according to a Deloitte Study.
“Four in 10 Americans surveyed were identified as value seekers. Of these consumers, almost two-thirds are cooking more meals at home (65%), and over half are purchasing cheaper ingredients from the grocery store (53%) and switching to store brands/private labels (59%), which is about 10 times the rate of non-value-seekers,” the data showed.
RTM Nexus CEO Dominick Misernadino believes that Foran is right to focus on overall value, but also worries that Kroger simply can’t give some shoppers the prices they need.
“Consumers don’t make decisions exclusively [based on] price; it’s a numerous amount of factors. So he’s not entirely wrong, but the worse the economy gets, the more pricing does become a factor,” he told TheStreet.
Kroger, however, is walking a tightrope as it tries to deliver the right mix of value and price.
“Brands that offer only low prices could stand to lose out to competitors who offer more, as economic headwinds continue to influence consumer behavior,” according to Deloitte.
Shoppers have been protective of their wallets, according to McKinsey’s State of the Consumer 2025 report.
“Globally, 79% of surveyed consumers are trading down but not necessarily by purchasing fewer items or seeking discounts at lower-priced retailers (though these actions are still common). Instead, more than half of surveyed consumers across markets say that they look for deals on every purchase,” McKinsey’s data showed.
Foran isn’t trying to turn Kroger into Walmart or Costco. Instead, he’s betting shoppers will accept higher prices if Kroger can convince them they’re getting better overall value.
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