Kroger closed last fiscal year with modest sales growth and improving margins, as the retailer said investments in value and operational efficiency helped strengthen its performance.

Total company sales reached $34.7 billion in the fourth quarter, up from $34.3 billion a year earlier.

Excluding fuel, sales increased 2.1 per cent compared with the same period last year. At the same time, gross margin rose to 23.1 per cent of sales in the quarter, compared with 22.7 per cent a year earlier.

The improvement was said to be driven by sourcing gains, lower supply chain costs, stronger fuel margins, reduced depreciation, and lower shrinkage, partially offset by price investments and the growing share of pharmacy sales.

“Our strong finish to the year reflects meaningful progress in strengthening the business,” said recently appointed CEO Greg Foran.

“We have the right foundation in place, and I’m focused on making it even stronger by delivering more value to customers, improving the customer experience in stores and online, and driving cost savings and productivity to fund our growth.”

For the full year, Kroger reported total sales of $147.6 billion, compared with $147.1 billion in 2024, which included $2 billion from Kroger Specialty Pharmacy sales.

Gross margin for the year improved to 22.9 per cent of sales from 22.3 per cent in the prior year. The increase was driven by sourcing improvements, lower shrinkage, and lower supply chain costs.

Looking ahead, the retailer expects identical sales excluding fuel to grow between 1 per cent and 2 per cent this year.

“Our guidance reflects our ability to invest more aggressively in value for customers while improving gross margins,” said David Kennerley, CFO, Kroger.

“These investments are supported by e-commerce reaching profitability, procurement efficiencies, and productivity gains across the business.”