While Kroger recently just announced plans to close 60 struggling stores in the next 18 months, interim CEO Ron Sargent has outlined an aggressive remodel plan that has shoppers eagerly excited. While it’s getting press for shutting down locations, Kroger is also investing billions remaking stores and finishing 30 large store projects in 2025, proof the company is doubling down on delivering a better customer experience where it counts most.
Strategic investment in high-growth markets
Kroger’s dual strategy of closing money-losing stores and investing handsomely in winning stores is a strategic trimming of its store base. Kroger plans to invest between $3.6 billion and $3.8 billion on capital expenses in 2025, with large chunks going into renovating stores, expanding stores, and new store construction. This monstrous spend is a show of faith by Kroger in its store base in an uncertain grocery environment.
Interim CEO Ron Sargent reiterated on conference calls that the company is “pivoting investments in high-growth opportunities” and “reallocating capital to higher-return initiatives.” This enables Kroger to invest in the highest long-term opportunity stores and close stores that do not fit customers’ needs anymore.
In-depth renovation features and enhancements
The renovation programs include an extensive range of customer-oriented improvements to modernize the shopping experience. Current examples across divisions give an indication of the extent of improvements:
- Store expansion and store layout enhancements: Complete remodels include massive square foot additions, like the Nashville Monroe Street store that increased from 45,573 square feet to more than 72,000 square feet for a price of $22 million. Also, new Marketplace stores are built with 123,000 square feet, significantly more shopping area.
- Improving fresh departments: New-format stores have expanded produce departments, upgraded deli and bakery departments, and improved meat and seafood sections. Such an improvement generally includes more grab-and-go and fresh sushi to meet changing customer preferences.
- Premium service enhancements: All but one of the new-format stores have Murray’s Cheese shops, Starbucks stores, and expanded wine and beer stores. There are also special amenities such as Houston’s sole Kroger wine bar.
- Technology integration: Kroger is propelling new technologies such as digital shelf signs, enhanced checkout, and increased pickup capability. The Scan, Bag, Go technology and QueVision queue management systems implemented by the company are expanding to drive wait time reduction and efficiency improvement.
Regional investment highlights
Kroger store renovation commitments are spread across several divisions with significant financial investment:
- Columbus Division: $64 million investment in the central and northwest part of Ohio includes the renovation of 18 stores in Circleville, Lancaster, and Columbus, as well as the construction of new buildings.
- Cincinnati/Dayton Division: $130 million is spent on the opening of three new stores, four fuel centers, and remodeling 16 stores with added departments.
- Louisville Market: It spent $170 million up to 2024 on a series of renovation and expansion projects in Louisville and Lexington stores.
Community impact and job creation
Apart from physical developments, the remodels create a significant amount of jobs. The Nashville Monroe Street remodel, for example, is set to create 50 new jobs when complete. The West Broadway Louisville store renovation didn’t just have a $1.25 million store makeover but an additional $500,000 infusion in wage hikes, boosting starting salaries for baggers to $14.70 and department managers to $25.85.
Kroger’s strategy to renovate focuses strongly on integrating innovation in order to develop “smart” shopping experiences. Kroger has collaborated with Microsoft to include digital shelving technology, IoT sensors, and addressable promotion displays. These technologies are meant to assist customers inside the stores more efficiently and offer personalized promotions and targeted product information.
- Fitted digital services: Remodeled stores include enhanced e-commerce pickup spaces, increased online order parking, and customer touch points. The firm’s digital sales expansion at 15% per year reflects strong customer uptake of these offerings.
Long-term vision despite challenges
While Kroger faces the difficult decision of closing 60 stores, the company’s substantial investment in renovations and new construction signals confidence in its future. Sargent emphasized that loyal customers shop both in physical locations and online, reinforcing the importance of maintaining high-quality brick-and-mortar experiences.
The company’s approach recognizes that not all locations can be saved, but those with potential deserve significant investment. By concentrating resources on successful stores and high-growth markets, Kroger positions itself to “deliver sustainable results” and remain competitive in an evolving retail landscape.
This balanced strategy of strategic closures paired with ambitious renovations demonstrates Kroger’s commitment to serving customers effectively while building a stronger, more efficient network of stores. For shoppers at the 30 locations receiving major upgrades in 2025, the future promises enhanced convenience, expanded selection, and modernized shopping experiences that reflect Kroger’s evolution as a 21st-century retailer.
