Kroger plans to eliminate about 3,000 corporate jobs over the next three years as the US supermarket group expands its use of AI and restructures its operations to help fund lower prices.
Chief executive Greg Foran said the changes would also support investment in frontline workers as Kroger competes with Walmart and Aldi for customers’ grocery spending.
The planned Kroger corporate job cuts represent roughly 37% of its approximately 8,200 corporate employees. They account for a much smaller proportion of the company’s total workforce of about 409,000 people, which supports more than 2,700 stores operating under brands including Ralphs, King Soopers and Fred Meyer.
In a memo to employees, Foran said: “Technology is reshaping what’s possible. The way work gets done is changing across every industry; we must adapt and take advantage of technology.”
What the Kroger job cuts could mean for prices
Retail analyst Neil Saunders said reducing corporate overhead could help Kroger lower prices, although the savings would probably be limited if spread across its full range of products.
“If spread across various products this kind of investment would take only cents off the price of an average basket,” Saunders said.
He said the effect could be more noticeable if Kroger concentrated savings on the products and categories where shoppers are most concerned about value. The job reductions form part of a broader effort to improve efficiency, he added.
Foran became Kroger’s chief executive in February after the abrupt resignation of the previous CEO. He previously led Walmart’s US business from 2014 to 2019 and now faces the task of giving consumers a reason to choose Kroger over its discount-focused rivals.
Kroger’s AI strategy
Kroger set out its AI plans in September, including tools designed to forecast demand, personalise savings and help customers plan meals and create shopping baskets around their budgets and dietary needs.
The company is also developing AI agents to help frontline employees prioritise daily tasks and notifications. It said AI training and tools would be made available to more than 400,000 workers.
However, Foran’s memo did not specify how many jobs would be replaced by AI. The technology programme is intended both to assist store workers and to change the way Kroger’s corporate operations are run.
Saunders cautioned that the planned reductions should not be viewed solely as a consequence of automation. “There is a degree to which Kroger’s corporate structure was bloated and inefficient, so some of these cuts would have happened regardless of any technological innovation,” he said.
He said the potential gains from AI included enabling Kroger to work faster with fewer employees and make better decisions on sourcing, forecasting and its supply chain, although “it will take some time before we see whether these things materialize”.
