The news: Competition between Kroger and Publix is intensifying as each pushes into the other’s territory.

• Publix plans to have a dozen locations in Kentucky—Cincinnati, Ohio-based Kroger’s backyard—by the end of the year, the company told The Wall Street Journal.
• Kroger is in the process of expanding its Harris Teeter banner in Florida, where Publix’s headquarters and two-thirds of its store fleet are located.

Zoom in: The battle for market share is forcing both grocers to sharpen their value proposition to shoppers—particularly Kroger, whose customer satisfaction score trails Publix. In addition to rolling out more promotions and buy-one-get-one deals, Kroger and Publix are offering more in-store amenities to boost visit frequency and basket size.

• Publix’s Cincinnati store has bright lights and wider aisles for easier navigation, a smoothie and coffee bar, and a seating area that plays host to weekly mahjong games.
• A new Kroger Marketplace in Edgewood, Kentucky contains a 6,500 square foot deli that features made-to-order sandwiches and other food options, as well as a Murray’s Cheese shop, sushi station, and on-site fuel center.

Why it matters: The Kroger-Publix clash reflects broader sector shifts. More grocers are embarking on ambitious expansion efforts, increasing the pressure on established stores to prove their value to shoppers.

• Sprouts expects to open 40 stores this year, with an additional 140 locations in the pipeline.
• Aldi plans to open more than 180 stores in 2026, bringing its total US footprint to nearly 2,800.
• Whole Foods plans more than 100 new locations over the next few years.

At the same time, traditional grocers’ influence is under threat as shoppers shift more spending to discounters like Walmart and Dollar General. Mass market retailers’ grocery penetration equaled that of traditional grocers in December, according to dunnhumby’s Consumer Trends Tracker—a first since the company began measuring the statistic nearly four years ago.

Recommendations for grocers: Standing out in the fiercely competitive grocery sector requires clear positioning and a robust value proposition—which doesn’t always have to be rooted in low prices. Companies can woo shoppers by remodeling stores to be more attractive and accessible, offering high-quality products, delivering tangible loyalty benefits, and providing excellent customer service.