Kroger Co. announced the appointment of Greg Foran as its new CEO, pulling him from a successful tenure at both Air New Zealand and Walmart U.S. Foran, known for boosting digital expertise and overseeing 20 consecutive quarters of domestic sales growth at Walmart, comes onboard after a painstaking search process. His appointment may signal a positive turn for Kroger, with industry experts suggesting a reevaluation of the company's online sales strategy might be in the cards.
Before Foran's appointment, the company attempted to solidify its market standing by merging with Albertson's, but the plan was blocked in late 2024. The modern supermarket landscape presents numerous challenges, including falling pharmacy sales and increasing competition from digital-savvy giants and discounters. To stay competitive, many grocers have chosen to keep prices low. It's anticipated that Foran, like his competitors at Walmart and Amazon, will emphasize e-commerce and delivery in his strategy.
Analysts at Morgan Stanley pointed out the growing competitiveness in the grocery sector, driven by the expansion of discounters like Aldi, changing shopping patterns due to weight loss drugs, and potential fall in pharmacy sales due to new government policies.
Foran's philosophy of "having a clean and orderly house before inviting company over" is expected to inform his leadership at Kroger. However, he'll also need to refine the company's e-commerce strategy. Currently, the company heavily relies on logistics and platform providers like Instacart, DoorDash, and Uber. The lack of full control of the customer interaction point may pose future risks, especially with the evolution of agentic commerce.
Despite significant environment challenges, Kroger shares have demonstrated resilience, maintaining their value even after the sudden resignation of former CEO Rodney McMullen. However, Kroger’s revenue has failed to meet consensus analyst estimates for the past six quarters. Following the news of Foran's appointment, Kroger shares experienced a 5% increase.