Kroger

“In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors, as well as the changing needs and preferences of our customers. We must compete by offering a convenient shopping experience for our customers, regardless of how they choose to shop with us, and by providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use.”

Annual report 2026A · The company itself

“Our strategy is focused on growing households and increasing customer loyalty by delivering great value and convenience, and investing in Fresh, Our Brands, Personalization and eCommerce.”

Annual report 2026A · The company itself

“eCommerce ​ We offer a convenient shopping experience for our customers regardless of how they choose to shop with us, including Pickup and Delivery. We offer Pickup and Harris Teeter ExpressLane™ — personalized, order online, pick up at the store services — at 2,408 of our supermarkets and provide Delivery, which allows us to offer digital solutions to substantially all of our customers. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers and orders placed through third-party platforms. These channels allow us to serve customers anything, anytime and anywhere with broad selection, convenience, and price.”

Annual report 2026A · The company itself

“The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on Fresh, Our Brands, Personalization and eCommerce, we are creating a shopping experience that builds loyalty and grows sales.”

Annual report 2026A · The company itself

“eCommerce sales increased 16% compared to 2024. Excluding the effect of fulfillment center exits in markets where Kroger does not operate stores, the sale of Vitacost.com, and the discontinuation of Ship Marketplace, eCommerce sales increased 17% compared to 2024. eCommerce sales include products ordered online and picked up at our stores and our Delivery solutions.”

Annual report 2026A · The company itself

“As more and more customers incorporate eCommerce into their permanent routines, we expect eCommerce sales to grow at a double-digit rate – a faster pace than other food at home sales – over time; and ​ ● Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses and productivity and cost savings initiatives that are focused on simplifying our business and modernizing our ways of working.”

Annual report 2026A · The company itself

“Our strategy is focused on growing households and increasing customer loyalty by delivering great value and convenience, and investing in Fresh, Our Brands, Personalization and eCommerce.”

Annual report 2026A · The company itself

“Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores and fuel centers and via our online platforms.”

Annual report 2026A · The company itself

“Events that adversely affect that trust, including inadequate disclosure to our customers of our uses of their information, failures to honor new and evolving data privacy rights and laws, failing to keep our information technology systems and our customers’ sensitive information secure from significant attack, theft, damage, loss or unauthorized disclosure or access, whether as a result of our action or inaction (including human error) or that of our business associates, vendors or other third parties, could adversely affect our brand and reputation and operating results and also could expose us to mandatory disclosure to the media, litigation (including class action litigation), governmental investigations and enforcement proceedings, material fines, penalties and/or remediation costs, and compensatory, special, punitive and statutory damages, consent orders, and/or injunctive relief, any of which could adversely affect our businesses, financial condition, results of operations or cash flows.”

Annual report 2026A · The company itself

“The emergence of artificial intelligence-powered agentic shopping tools, in which AI agents autonomously research, compare and purchase products on behalf of consumers could further disrupt traditional grocery retail. If customers increasingly delegate purchasing decisions to AI agents that prioritize price, speed or other factors over retailer preference or brand loyalty, we could become disintermediated from the customer relationship. This could result in reduced visibility into customer behavior, increased margin pressure and a weakened ability to influence purchasing decisions.”

Annual report 2026A · The company itself

“Rapidly evolving technological and regulatory developments related to artificial intelligence (“AI”) and related technologies may increase competitive, legal, and security risks facing the Company. While we are utilizing AI and machine learning capabilities across our business, our competitors or other third parties may incorporate AI into their products, services and operations more successfully, which could impair our ability to compete effectively, or adversely affect our results of operations or our ability to improve operational efficiency.”

Annual report 2026A · The company itself

“Our Data ​ Kroger serves approximately 63 million households annually, and because of our rewards program, over 95% of customer transactions are tethered to a Kroger loyalty card. Our over 20 years of investment in data science capabilities allows us to utilize this data to create personalized experiences and value for our customers and enables our growing, high operating margin alternative profit businesses, including data analytic services and third-party media revenue.”

Annual report 2026A · The company itself

“Our Company is built on the foundation of our retail grocery business, which includes the added convenience of our retail pharmacies and fuel centers.”

Annual report 2026A · The company itself

“As of January 31, 2026, Kroger operated, either directly or through its subsidiaries, 2,697 supermarkets, of which 2,250 had pharmacies and 1,731 had fuel centers.”

Annual report 2026A · The company itself

“Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like retail media.”

Annual report 2026A · The company itself

“Our strategy is focused on growing households and increasing customer loyalty by delivering great value and convenience, and investing in Fresh, Our Brands, Personalization and eCommerce.”

Annual report 2026A · The company itself

“We are continuing to enhance our connection with our customers with investments in our top priorities – Fresh, Our Brands, Personalization and eCommerce. Each of these strategies is designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe that continuing to focus on these top priorities will enable us to meet the wide-ranging needs and expectations of our customers.”

Annual report 2026A · The company itself

“Media ​ Kroger Precision Marketing, our retail media business, leverages our rich first-party data and deep customer relationships to provide targeted, measurable advertising solutions for consumer-packaged goods companies and a growing number of other industry partners. With insights drawn from the shopping behaviors of millions of loyal households, Kroger Precision Marketing enables advertisers to reach customers with relevant messaging across a variety of digital and in-store channels, including on-site search, display, social media, connected TV, and in-store placements.”

Annual report 2026A · The company itself

“Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like retail media.”

Annual report 2026A · The company itself

“Merchandising and Our Brands ​ Our Brands products play an important role in our merchandising strategy and represented over $39 billion of our sales in 2025.”

Annual report 2026A · The company itself

“Our Data ​ Kroger serves approximately 63 million households annually, and because of our rewards program, over 95% of customer transactions are tethered to a Kroger loyalty card. Our over 20 years of investment in data science capabilities allows us to utilize this data to create personalized experiences and value for our customers and enables our growing, high operating margin alternative profit businesses, including data analytic services and third-party media revenue.”

Annual report 2026A · The company itself

“Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable.”

Annual report 2026A · The company itself

“We own 33 food production plants, primarily bakeries and dairies, which supply approximately 20% of Our Brands units sold in our supermarkets; the remaining Our Brands items are produced to our strict specifications by outside manufacturers.”

Annual report 2026A · The company itself

“We intend to continue investing in new store growth as a key driver of long-term value creation. New stores allow us to increase penetration in existing markets, enter new geographies and reach new customers. We expect new store development to contribute to improved return on invested capital, volume growth and stronger market share performance.”

Annual report 2026A · The company itself

“Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores and fuel centers and via our online platforms.”

Annual report 2026A · The company itself

“As of January 31, 2026, Kroger employed more than 403,000 full- and part-time employees.”

Annual report 2026A · The company itself

“We are investing in our associates by expanding our industry-leading benefits, including continuing education, training and development and health and wellness. During 2025, we increased associate wages, resulting in an average hourly rate of more than $20, and a rate of more than $26 with comprehensive benefits factored in, which is a 43% increase in rate in the last eight years.”

Annual report 2026A · The company itself

“OG&A expenses, as a percentage of sales, were 19.2% in 2025 and 17.3% in 2024. The increase in 2025, compared to 2024, resulted primarily from the effect of decreased fuel sales, which increases our OG&A rate, as a percentage of sales, the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 OG&A Adjusted Items, increased healthcare costs and increased multi-employer pension contributions, partially offset by the 2024 OG&A Adjusted Items, decreased incentive plan costs and continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.”

Annual report 2026A · The company itself

“Our technology systems have been, and may be in the future, disrupted from circumstances beyond our control, as we regularly defend against and respond to data security related attacks. Cyber-attackers have targeted and accessed, and may in the future again target and, if successful, access information stored in our or certain third parties’ systems in order to misappropriate confidential customer or business information.”

Annual report 2026A · The company itself

“Our cybersecurity program, continued investment in our information technology systems, and our processes to evaluate and select vendors with reasonable information security controls may not effectively insulate us from potential attacks, data breaches or disruptions to our business operations, which could result in a loss of customers or business information, negative publicity, damage to our reputation, and exposure to claims from customers, financial institutions, regulatory authorities, payment card associations, associates and other persons. Any such events could have an adverse effect on our business, financial condition, results of operations or cash flows and may not be covered by our insurance. In addition, compliance with rapidly changing privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes and may require us to devote significant management resources to address these issues.”

Annual report 2026A · The company itself

“Supporting Labor Relations ​ More than two-thirds of our associates are covered by collective bargaining agreements negotiated with local unions affiliated with one of several different international unions. There are approximately 350 such agreements, usually with terms of three to five years.”

Annual report 2026A · The company itself

“Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, prescriptions, controlled substances, zoning, vehicle operations, fuel operations, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they may have on our operations. They could, however, significantly increase the cost of doing business.”

Annual report 2026A · The company itself

“PAYMENT SYSTEMS ​ We accept payments using a variety of methods, including cash and checks, select credit and debit cards, and Kroger Pay, a mobile payment solution.”

Annual report 2026A · The company itself

“For certain payment methods, we pay interchange and other related acceptance fees, along with additional transaction processing fees.”

Annual report 2026A · The company itself

“Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates and greater value for our customers to ensure we deliver a full, fresh and friendly experience for every customer, every time.”

Annual report 2026A · The company itself

“This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, sourcing improvements, lower shrink, lower supply chain costs and decreased fuel sales, which have a lower gross margin rate, partially offset by increased pharmacy sales, which have a lower gross margin rate, and increased price investments.”

Annual report 2026A · The company itself

“2025 EXECUTIVE SUMMARY ​ We achieved strong results in 2025, driven by continued performance in eCommerce and pharmacy along with momentum in Fresh and Our Brands. We saw underlying improvements in market share trends and solid sales growth that reflect meaningful progress and demonstrate the strengthening of the business.”

Annual report 2026A · The company itself

“If debt markets do not permit us to refinance certain maturing debt, we may be required to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness. Changes in our credit ratings, or in the interest rate environment, could have an adverse effect on our financing costs and structure.”

Annual report 2026A · The company itself

“DATA AND TECHNOLOGY ​ Our business is increasingly dependent on information technology systems that are complex. If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations.”

Annual report 2026A · The company itself

“Total supermarket fuel sales decreased 9.3% in 2025, compared to 2024, primarily due to a decrease in the average retail fuel price of 6.1% and a decrease in fuel gallons sold of 3.4%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel.”

Annual report 2026A · The company itself

“In addition, certain states have adopted Extended Producer Responsibility (“EPR”) packaging legislation with which we must comply.”

Annual report 2026A · The company itself

“To help identify and manage climate-related risks to our business, we conduct a periodic quantitative climate risk assessment to determine the likelihood that different physical climate risks, including drought, extreme heat and extreme precipitation, would affect our operations at representative facilities in different geographies and, in turn, potentially increase operating costs for these facilities. As a result of our past risk assessments, we do not currently anticipate the modeled physical risks to adversely affect our financial condition, results of operations or cash flows for the foreseeable future.”

Annual report 2026A · The company itself