Kroger’s Bulk Blind Spot: Why Overpricing and Outdated Thinking Are Driving Shoppers Away

 

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® has plenty of opinions, this article is one of them!  When 62% of U.S. households are one or two people, selling 10 pounds of pork chops is a business model built for yesterday. Fast food and modern grocers are eating Kroger’s lunch—literally.

For decades, Kroger stood tall as America’s grocery gold standard—trusted, reliable, and efficient. But in 2025, that same legacy scale is starting to look more like an anchor. Consumers are paying more, getting less, and noticing every price tag.

Let’s be clear: Kroger has a price problem, a portion problem, and a people problem.

 

1. The Price Problem: When “Loyalty” Costs You More

Recent basket comparisons show Kroger’s prices averaging 8–15% higher than Walmart, Aldi, and even Costco on everyday items—even after loyalty discounts (DataWeave, Q2 2025). That’s not just perception; it’s quantifiable.

In an era of stubborn food inflation, loyalty programs that don’t actually save money are alienating shoppers. What once felt like a reward now feels like a gimmick.

“When a ‘loyalty discount’ costs more than the competition’s shelf price, you don’t have a loyalty program—you have a leakage problem.”
— Steven Johnson, The Grocerant Guru®

Compounding the issue, Kroger’s high-profile share buybacks, dividend increases, and the still-controversial Albertsons merger have made headlines—not for creating customer value, but for enriching shareholders. The optics reinforce what consumers already suspect: they’re paying more so investors can profit.

 

2. The Portion Problem: Bulk in a Nation of Singles

Here’s a demographic reality: 62% of U.S. households now consist of one or two people (U.S. Census Bureau, 2024). That’s not a trend—it’s the new normal.

Yet Kroger’s meat and produce departments still look like they’re built for families of five. Shoppers see three-pound packs of hamburger, gallon-sized sauces, and 10-pound slabs of pork chops. For millions of Americans living alone or as couples, that’s not value—it’s waste.

Chains like H-E-B, Trader Joe’s, and Publix are thriving because they’ve recalibrated for smaller households—offering right-sized proteins, meal-for-one kits, and fresh ready-to-eat options.

“Selling family-sized portions to single households is like trying to stream VHS—wrong format, wrong decade.”
— Steven Johnson, The Grocerant Guru®

This isn’t nostalgia; it’s negligence. When 60+% of households don’t fit the “family pack” model, continuing to merchandise like it’s 1985 is a recipe for attrition.

 

3. Fast Food Is Winning the Grocery Fight

Kroger’s biggest competitor isn’t just Walmart anymore—it’s Wendy’s, 7-Eleven, and Wawa. Why? Because QSRs and c-stores are now serving meals that are cheaper, faster, and portion-perfect.

According to Technomic (2025), Americans visit QSRs 5.6 times per week, up 11% over three years. Meanwhile, grocery trip frequency has fallen 6% year-over-year (IRI 2025). Consumers aren’t cooking bulk—they’re eating ready-to-eat.

It’s no wonder prepared foods and grab-and-go sales in grocery are up 7.8% year-over-year, while traditional grocery baskets are flat (Circana, 2025). Shoppers are shifting dollars toward convenience.

Kroger’s deli and prepared meal sections, once category leaders, are now stale by comparison. While Whole Foods, Hy-Vee, and Publix GreenWise units innovate with fresh bowls and chef-inspired menus, Kroger’s offerings remain utilitarian.

“If grocery doesn’t feed time-pressed consumers fresh, fast, and portioned meals, fast food will—every single day.”
— Steven Johnson, The Grocerant Guru®

 

4. Five Reasons Consumers Are Migrating Away from Kroger

1.       Overpricing & Price Fatigue
Consumers know they’re paying more. In the age of price transparency apps, that’s lethal.

2.       Pack Size Mismatch
62% of households = one or two people. Kroger is still selling for a nuclear family that no longer exists.

3.       Convenience Gap
Walmart+ and Target Drive Up are faster, simpler, and cheaper than Kroger’s pickup options.

4.       Labor & Trust Issues
Store closures, worker disputes, and merger backlash erode the brand’s community connection.

5.       Failure to Evolve
Competitors like Aldi, Trader Joe’s, and Costco constantly reinvent. Kroger keeps re-tagging bulk displays.

 

5. Data Points That Tell the Story

·       62% of U.S. households: one or two residents (U.S. Census, 2024)

·       Prepared foods up 7.8% YoY (Circana, 2025)

·       Grocery trip frequency down 6% (IRI, 2025)

·       73% of consumers switched grocery brands due to cost in the last 12 months (IRI, 2025)

·       Fast-food visits up 11% since 2022 (Technomic, 2025)

These numbers are Kroger’s scoreboard—and they’re losing ground.

 

6. The Path Forward: From Bulk to Bite-Size

Kroger can still win, but not by doubling down on outdated strategies. Here’s what must change:

• Repack for Relevance.
Shift toward smaller SKUs and meal-for-one packaging. Offer “Fresh for One” bundles in proteins, sides, and fresh meals.

• Win Back Trust Through Transparent Pricing.
Scrap confusing loyalty math. Guarantee best prices on a basket of essentials—publicly.

• Become a Meal Destination.
Invest in high-quality, chef-crafted prepared foods. Think: “Dinner for Two” meal deals that rival fast-casual dining.

• Reinvest in People and Purpose.
Better pay, stronger local sourcing, and visible community impact rebuild the emotional bridge that price alone cannot.

“If Kroger wants to stop the consumer exodus, it needs to stop selling yesterday’s quantities and start selling today’s convenience.”
— Steven Johnson, The Grocerant Guru®

 

Think About This

Kroger’s size is still a competitive weapon—but only if wielded wisely. Scale should mean agility and accessibility, not complacency. America’s eating habits have shifted, and the competition—from Aldi to Chick-fil-A—is capturing those shifts faster.

Kroger must rediscover what it once understood: consumers lead, and retailers follow—or fail. The modern shopper isn’t stocking up; they’re snacking smart, portioning fresh, and shopping by the meal, not the month.

Until Kroger adapts, it’s not just losing customers—it’s losing cultural relevance.

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how www.FoodserviceSolutions.us can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

After the Failed Kroger–Albertsons Merger: Looking Ahead Amid Store Closures, Market Pressures, and Strategic Reorientation

 

The collapse of the proposed $24.6 billion merger between Kroger and Albertsons exposed deep vulnerabilities in both companies’ strategies. But today, they’re shifting focus—pivoting toward cost discipline, digital transformation, and customer-centric innovation. Here’s how they intend to move forward.

 

Forward-Looking Strategy: Kroger

1. Reinvesting Closure Savings into Customer Experience
Kroger is closing 60 underperforming stores (~5% of its locations) and has taken a $100 million impairment charge. The company expects a “modest financial benefit” and is channeling these savings toward competitive pricing, targeted store remodels, new openings, and enhanced customer service—including private label and pharmacy growth.

2. Radical Store Transformation: The Marketplace Concept
Starting in 2025, Kroger is rolling out “Marketplace” stores—featuring diversified offerings like clothing, home goods, specialty foods, and drive-thru pharmacies. These modernized formats, tailored to local demographics, are designed to elevate in-store engagement and growth.

3. Corporate Restructuring and Operational Efficiency
Kroger is laying off fewer than 1,000 corporate staff to streamline operations. These savings are being reinvested into new openings, price improvement, and enhancing the customer experience, while investor sentiment remains stable.

4. Building Leadership and Digital Capabilities
New leadership is being installed Kroger brought in a new CFO and established a unified e-commerce business unit led by a chief digital officer. The company also accelerated private label expansion and optimized its analytics subsidiary (84.51°) to sharpen efficiency.

5. Refocusing Strategy from Within
With its big-ticket merger off the table, Kroger is recalibrating toward core competencies: operational stability, cost discipline, and customer loyalty. The board is steering the company through this pivot, while leadership remains in flux.

You Can't Build 

Share of Stomach

Looking Like Yesterdays Business 

 

Forward-Looking Strategy: Albertsons

1. New CEO and Reinforced Strategy
Susan Morris took over as CEO on May 1, 2025, succeeding Vivek Sankaran. She brings deep institutional experience. Her "Customers for Life" strategy emphasizes loyalty, personalized digital experiences, and private-label strength to build sustainable growth.

2. Loyalty Program Enhancement
Albertsons expanded its “Albertsons for U” loyalty program across 380 stores. Key features—like personalized deals, auto cash-off, and extended redemptions—aim to drive retention and basket growth. The company also highlighted that 90% of goods are sourced domestically, reinforcing price and supply stability.

3. Significant Productivity and Tech Investments
Albertsons announced a $1.5 billion productivity savings goal between FY2025–2027, fueled by technology modernization and automation (including automating 30% of distribution volume and upgrading warehouse management systems by end of 2025).

4. Digital, Media & Omnichannel Acceleration
Digital sales surged 25% in Q1; Albertsons is rolling out omnichannel, in-store digital tools, and the Albertsons Media Collective (retail media)—mirroring industry peers’ moves to monetize digital touchpoints.

5. Balanced Investment-Year Outlook & Long-Term Growth
Fiscal 2025 is positioned as an intensive investment phase—starting 2026, the company expects ≥2% annual same-store sales growth and Adjusted EBITDA to outpace sales, signaling a return to disciplined growth execution.

 

Summary Table: Strategic Pathways Forward

Kroger	Albertsons
Reinvests store closure savings into remodels, pricing, new formats (Marketplace)	Champions digital, loyalty-based customer personalization (“Customers for Life”)
Cuts ~1,000 corporate roles; focuses on internal efficiency	Targets $1.5B in cost savings via automation, tech, and logistics
Builds leadership in digital and operations post-merger disruption	Launches retail media and omnichannel tools to deepen engagement
Enhances private-label portfolio; centralizes e-commerce	Expanding loyalty program perks and promoting domestic sourcing
Refocused core strategy after failed merger for stability	Transitioning from investment phase to accelerated growth in 2026+

 

Bottom Line

While both Kroger and Albertsons continue to battle the aftermath of their failed merger, they are charting divergent but proactive futures. Kroger is closing underperforming assets and refocusing on operational core strengths, customer experience, and private-label leadership. Albertsons is doubling down on technology, loyalty, digital channels, and cost transformation—all under fresh leadership.

These forward-looking strategies could determine whether each player can reclaim footing amid accelerating competition from e-commerce giants, discounters, and digitally-native grocers.

 

Gain a Competitive Edge with a Grocerant ScoreCard

Unlock new opportunities with a Grocerant ScoreCard, designed to optimize product positioning, placement, and consumer engagement.

Since 1991, Foodservice Solutions® has been the global leader in the Grocerant niche—helping brands identify high-growth strategies that resonate with modern consumers.

📞 Call 253-759-7869 or 📩 Email Steve@FoodserviceSolutions.us

Aldi’s Big Apple Leap: Why Growth Is on the Menu

 

As the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, Steve Johnson, has been tracking Aldi’s trajectory for years. With the announcement that Aldi will open its first Manhattan store on 42nd Street near Times Square in 2026, the momentum behind the discount grocer has never been stronger. The new 25,000-square-foot location at The Ellery will be larger than most Aldi stores, signaling that the company isn’t just entering New York City—it’s making a statement.

Three Reasons Aldi Is Ready for NYC

1.       Proven Expansion Muscle – Aldi has committed to opening 800 new U.S. locations by 2028, including 225 this year alone. With nearly 120 stores opened in 2024 and a seamless entry into competitive markets like Las Vegas, Aldi has shown it can adapt to urban, suburban, and regional consumer needs.

2.       Consumer Foot Traffic Growth – According to Placer.ai, Aldi posted double-digit foot traffic growth for 11 consecutive months in 2024, peaking at 22.9% in February. Even at 8.8% growth in December, Aldi outpaced every major competitor. That sustained momentum demonstrates that Aldi’s value-driven model resonates deeply with today’s shoppers.

3.       Right Place, Right Time – By positioning itself in Times Square’s dense retail and residential corridor, Aldi is aligning with New York’s growing demand for affordable, fresh, and convenient grocery solutions. With its compact, curated format, Aldi fits the urban shopper mindset better than sprawling supermarkets.

Five Reasons Consumers Continue to Migrate to Aldi

1.       Price Advantage – Aldi is known for delivering 30–40% savings compared to traditional supermarkets, critical in an inflation-sensitive economy.

2.       Smaller Store Footprint – At 18,000–25,000 square feet, Aldi stores make shopping faster, easier, and less overwhelming.

3.       Private Label Power – Aldi-exclusive brands make up over 90% of its inventory, ensuring consistent quality and innovation at lower prices.

4.       Freshness and Flavor – Aldi continues to invest in produce, prepared meals, and global flavors, expanding beyond its original discount focus.

5.       Trust in Growth Markets – From suburban sprawl to dense urban centers, Aldi has proven it can scale, adapt, and still deliver value.

Why Publix, Kroger, and Walmart Should Be Concerned

1.       Traffic Shift – Aldi’s foot traffic growth (22.9% at its peak) dwarfs competitors, meaning customers are voting with their feet.

2.       Private Label Disruption – Aldi’s private label innovation puts pressure on big-box retailers to compete on taste, packaging, and price.

3.       Urban Strategy – By cracking Manhattan, Aldi is showing that Walmart’s large-format model is not the only path forward in dense urban markets.

4.       Consumer Loyalty Loop – Aldi’s consistent price perception builds loyalty, threatening long-standing regional and national chains who rely on promotional pricing to drive traffic.

Generational Food Preferences: Aldi’s Advantage

·       Gen Z: Price Advantage + Transparency
According to Deloitte’s food retail insights, 63% of Gen Z consumers rank affordability as their #1 grocery priority. Aldi’s efficiency-driven model and clear value proposition make it a natural fit.

·       Baby Boomers: Less Options, More Flavor
Boomers increasingly prefer streamlined assortments with fewer choices but better quality and flavor. Aldi’s tight SKU selection delivers exactly that—no wasted time, no shelf overload.

·       Millennials: Small Package Size + Food Discovery
Millennials want convenience-sized packaging and opportunities for new flavor exploration. Aldi’s rotation of seasonal finds, international products, and smaller pack options hits the sweet spot for this adventurous, urban-focused demographic.

Final Thought from the Grocerant Guru®

Aldi’s Manhattan move is more than just another store opening—it’s proof that the grocerant niche is reshaping grocery retail. With a laser focus on value, flavor, and innovation, Aldi is positioning itself as the growth leader in food retail. Competitors should take notice: the migration toward Aldi is not slowing—it’s accelerating.

Gain a Competitive Edge with a Grocerant ScoreCard

Unlock new opportunities with a Grocerant ScoreCard, designed to optimize product positioning, placement, and consumer engagement.

Since 1991, Foodservice Solutions® has been the global leader in the Grocerant niche—helping brands identify high-growth strategies that resonate with modern consumers.

📞 Call 253-759-7869 or 📩 Email Steve@FoodserviceSolutions.us