Kroger is scaling back its footprint across the U.S., planning to shut down 60 grocery stores over the next year and a half. This decision will impact roughly 5% of the company’s 1,239 stores and result in a $100 million impairment charge, according to its Q1 earnings report released June 20th.
“As a result of these store closures, Kroger expects a modest financial benefit,” the company shared in its filing. “Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance.”
Kroger operates stores in 16 states, including Mississippi, Missouri, Louisiana, Alabama, and Illinois. The company’s largest presence is in Indiana, Kentucky, Texas, Tennessee, Michigan, Georgia, and Ohio.
Employees from affected locations will be offered roles at other nearby stores. However, Kroger did not elaborate on what “reinvesting…into the customer experience” entails. The company also confirmed to PEOPLE that it “will not be releasing a store list” and had no additional details to provide.
The closures come on the heels of a year-over-year dip in total company sales, falling from $45.3 billion to $45.1 billion. Despite this, Kroger reported solid performance in its pharmacy segment and emphasized strong gains in fresh goods and eCommerce.
In March, Kroger faced leadership upheaval when longtime CEO Rodney McMullen stepped down following a board investigation into his conduct. Ronald Sargent has since stepped in as interim CEO.
Kroger says it remains “confident in our ability to build on our momentum” and deliver for customers and shareholders alike.
