The news: After reporting adjusted sales growth of just 0.1% and a comparable sales rise excluding fuel of 0.2%, Kroger cut its 2026 sales outlook as pressured consumers bought fewer items and competition for grocery spending intensified. The supermarket chain now expects comparable sales excluding fuel to grow 0.2% to 0.8%, down from its previous forecast of 1.0% to 2.0%.

The results, which come a little more than a month after Publix reported a 0.5% decline in comparable store sales, point to broader challenges facing traditional supermarkets.

Zooming in: The rising cost of gas and groceries is US adults’ top affordability concern, per a recent Harris Poll, and that pressure is changing how they shop. Gas prices rose 27.4% YoY, while food prices increased 2.7% YoY in August.

• Kroger CEO Greg Foran noted during the grocer’s earnings call that consumers are increasingly buying based on need rather than want.
• At the same time, a 13% decline in SNAP enrollment stemming from work requirements and other provisions in the tax and spending bill passed last year has reduced spending power among some lower-income households.

That combination is sharpening consumers’ focus on value and increasing their willingness to shop across retailers. And traditional grocers aren’t simply competing against other supermarkets. They’re increasingly competing against retailers with very different business models and advantages.

The data bears that out: Kroger, Albertsons, and Ahold Delhaize USA all lost market share in the 12 months ended June 30, per a Numerator analysis of 15 food retailers. Amazon and Whole Foods posted the largest grocery market share gain, followed by Costco and Walmart.

• Amazon’s gains coincide with its move to fold perishables into same-day delivery. It said grocery and everyday essentials grew “meaningfully faster” than the rest of its business in Q2, which is notable given that its overall net sales increased 20%.
• Warehouse clubs are also gaining traction with higher-income consumers, with 11% of US consumers in households earning at least $150,000 naming Costco their primary grocery store, per a recent YouGov survey.
• Discount grocers like Aldi and specialty retailers like Trader Joe’s are also eating into traditional supermarkets’ share.

Implications for retailers: Traditional grocers increasingly occupy an uncomfortable middle ground. They lack the scale and diversified profit pools that help Walmart compete aggressively on price, Costco’s membership economics, Amazon’s convenience advantage, and specialty retailers’ differentiated product mix. As shoppers become more willing to move their grocery dollars around, grocers need to give them clearer reasons to stay.

Kroger is trying to do that by expanding private labels, natural and prepared foods, and making its loyalty program more valuable for everyday grocery purchases. Members can now redeem points for grocery savings rather than only fuel rewards.

Those types of investments can help traditional grocers sharpen their value proposition without competing solely on price alone. The challenge is giving shoppers something distinctive enough—some combination of better products, rewards, service, or convenience—to keep them from taking more of their grocery baskets elsewhere.

Go further: Read about Kroger, Publix, and other top retailers in our Live Earnings Report: Retail & Ecommerce Tracker Q2 2026.