August 28, 2025
Image Courtesy of Kroger
Can Kroger Avoid Negative PR Fallout From Store Closings?
Kroger in June announced plans to close 60 underperforming stores over the next 18 months, and is now facing public relations blowback with each store closure announcement.
On its first-quarter analyst call, Ron Sargent, interim CEO, implied the amount of stores set for closure is higher than normal because its annual store review was paused during the failed merger process with Albertsons.
“We’re simplifying our business and reviewing areas that will not be meaningful to our future growth,” Sargent said. “Unfortunately, today, not all of our stores are delivering the sustainable results we need. Also, important to note, we paused our annual store review during the merger process. To position our company for future success, this morning, we announced plans to close approximately 60 stores over the next eighteen months.”
He added, “We don’t take these decisions lightly, but this will make the company more efficient.”
Kroger Comes Under Fire For Continued Store Closures
So far, Kroger has reportedly announced closures for 39 locations and scores of articles have arrived detailing the related job and city tax losses, as well as threats to food access. Many appear to speculate whether Kroger could have done more to fend off the shutterings.
Indiana State Rep. Maureen Bauer, in a social media post, described the closure of a Kroger South Bend store as a “devastating loss.”
“For many families on the west side, this Kroger is one of the only nearby options for fresh, affordable groceries,” Bauer said. “Its closure deepens an already growing food desert, making it even harder for our neighbors to access the food they need to thrive.”
Illinois resident Kelly McDonald told the Journal Star about the closing of a her local Kroger store in Peoria, “I’m still coming in here — hoping the signs will be taken down and they’ll change their mind.”
Paul Montgomery, the mayor of Kingsport, Tennessee, was among those sending a letter to Kroger pleading for a store in his city to stay open.
“I think it’s important,” Montgomery told WJHL-TV. “We have a lot of citizens who use that store, and it’s important to them for their shopping as well as its economic development for our city.”
“After 45 years, I’m very devastated,” Deatrice James, a Kroger employee for 45 years, told News 5 WCYB regarding the closure of Kroger stores in Abingdon and Kingsport in Virginia. “I mean, we’ve done everything Kroger has asked us to do, we’ve made our employees our family.”
Her store held protests, guided by unions, that are also encouraging residents to sign online petitions to keep stores open.
“Kroger’s closures put profit over people, plain and simple,” Faye Guenther, president of the UFCW union, said in a mid-August press release following news of the closure of two stores in Washington’s Puget Sound region.
“Kroger is a large publicly traded company that is presumably maximizing return for their shareholders,” said Ben Zarlingo, councilman in Washington’s Everett City — an area seeing the closing of a Kroger-owned Fred Meyer location.
“I understand the need to make strategic business decisions, but when it negatively impacts our local families and hinders their ability to access the day-to-day basics they rely on, it’s my duty to speak out for them,” Zarlingo added.
Kroger’s store closures come as the grocer, on Tuesday, confirmed plans to lay off nearly 1,000 corporate employees. In an internal letter, Kroger said it was looking for ways “to simplify the organization, shift resources closer to our customers and focus on work that creates the most value.”
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Christopher P. Ramey
President, Affluent Insights & The Home Trust International
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Jamie Tenser
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Recent Discussions
Discussion Questions
Is there a smooth way for Kroger to soften the blow of store closures and salvage the goodwill of affected customers?
Are grocery closures more vulnerable to strong consumer backlash than closings in other channels?
Poll
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Store closures are not exactly something that will be welcomed with open arms, especially in the affected areas. However, when you have a store estate as large as Kroger’s it is sensible to prune the portfolio every so often. The dynamics and economics of store trade areas change over time and if a shop is no longer working financially and has no prospects of being revived then it is logical to close it. There may be some negative PR, but Kroger’s primary duty is to generate a return for investors, not to seek good headlines. I’d say that the bigger issue isn’t store closures, but greater scrutiny around the botched merger and the resignation of the former CEO. That is something that may generate bad headlines as well as upset investors.
Supermarkets form deep roots in the communities they serve. They see their customers frequently, support their communities and provide the valuable service of feeding their customers. Because of the close ties developed, when circumstances lead to a supermarket store closure, the community takes it hard; whether Kroger or any other supermarket. Much harder than for most other store closures.
As Neil noted in his comment, pruning underperforming locations is part of running any business.60 stores looks like a lot, but 60 stores is only about a 2% trim in stores for Kroger. That’s a pretty surgical reduction.
Kroger’s failed merger with Albertsons and Rodney McMullen’s abrupt resignation in early March frame the company’s path forward as they search for the next CEO. The store closures, combined with the recently announced corporate layoffs, exacerbate the company’s relationships with its stakeholders. Successful grocery stores are integral to the communities they serve, from employees to customers, and from volunteers to local fundraising efforts. You can’t surgically extract a store with a scalpel; the longer a store has been open, the more pervasive its community’s connective tissues become. For Kroger, the company needs to carefully evaluate its decades-long investments through thoughtful and nuanced stakeholder analysis, rather than relying solely on spreadsheet-driven shareholder assessments.
The future CEO will need to adopt a strategy that more carefully balances shareholder demands for profitability with the long-term, community-centric investments essential to the grocery business’s health and stability. These investments should aim to rebuild trust, operational excellence, and foster community engagement.
Where customers are not directly affected, the store closings will be fairly insignificant. However, there are at least two small exceptions.
1) PR will suffer in the neighborhoods that are losing stores.
2) Consumers will worry that closure might next to come to their store.
Store closures are common these days, but it is important for retail chains to do a thoughtful job of explaining the reasons, and reasons, why not.
Groceries are among the more vulnerable for two (rather obvious) reasons:
(1) They’re something pretty much everyone uses
(2) They’re a necessity; how much of a necessity depends on how many other options someone has open to them (which is to say the sole supermarket in a small town is more of an issue than a suburban area w/ five stores nearby)
There’s probably little than be can done to completely avoid fallout, so the best goal is to minimize closing them in the first place; translation: allowing a store to degrade, or buying a competitor and then closing them will certainly draw condemnation… deservedly so IMO.
A publicly held company has pressure to keep shareholders happy. It’s part of the company’s responsibility to be profitable. As a result, sometimes difficult decisions are made that affect both customers and employees. I’m sure it isn’t Kroger’s goal to upset its customers and employees, but unfortunately, that happens. That said, there are strategies that include a focus on community that go beyond profit that can be considered. My question is if “under performance” means a loss, or does it mean it’s just not as profitable as the brand would like to be?
So let me get this straight….kroger has 2,719 stores and they’re closing 39 because they’re underperforming. Why is this news? I just think the times we live in are getting whackier and whackier.
between this and the Cracker Barrel fiasco (maybe it would have been a more interesting story if they’d just changed their name to Barrel and left the man sitting there), I’m deciding the country is going mad,
PS. Their introduction of themselves to South Florida with no store and all private label store deliveries was a dumber move. The marketing message? We have refrigerated trucks. That’s baseline, baby
There’s no smooth way to soften the blow of store closures. And Kroger needn’t worry about the goodwill of their clients when it wasn’t sufficient to keep a store open.
Anytime grocery stores are closed and without a new or remodeled one to take its place, its a net-negative on several layers. The community loses out on an important anchor, as do dozens of jobs, vendors and local retail tax revenue. A hub of sorts is now gone. And shortly after, a vacant building sits as boarded up, which never looks good in the neighborhood. Hopefully another player comes forward for these empty sites, for the sake of the community and another operator to perform better.
The only upside for Kroger here is the shareholders.
For a grocery chain as large as Kroger, these few store closures are barely a blip from a national news perspective. Shareholders want their investments to be prudently managed, and pruning the dead wood is a tried-and-true business tactic.
Taken individually, however, a single large supermarket is a community anchor, typically accounting for 50 or more FTE jobs and driving half a million or more in sales each week. In smaller communities and some urban settings that store may be an essential distributor of food and household items. It may be a sponsor of the local Little League and an important advertiser in local media. No wonder there has been a hue and cry.
In the era of social media, regular folks (including store employees and union members) have learned how to air their local grievances using the national megaphone. When a community faces a loss due to a corporate decision, it is normal to appeal to the national conscience and try to change things.
I’d venture that Kroger management knew full well it would be publicly criticized for shuttering these stores.
Companies are not charities.
Is the premise that the merger was going to save these stores? By what miracle? Were these stores owned or leased? How will these properties be monetized in their next life? And that’s going to be easier, and more profitable than finding a way to keep a grocery store open? A store with guaranteed daily customers, even if low in count? There was no mixed-use solution that would have prevented the creation of a food desert…???
Kroger needs to take a step back, on a regular basis, and cull their underperforming stores. This is smart business, raises the profile of access to a Kroger store in the consumer’s mind. It also elevates the corporate stock position, and demonstrates good principles in managing their business.
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Store closures are not exactly something that will be welcomed with open arms, especially in the affected areas. However, when you have a store estate as large as Kroger’s it is sensible to prune the portfolio every so often. The dynamics and economics of store trade areas change over time and if a shop is no longer working financially and has no prospects of being revived then it is logical to close it. There may be some negative PR, but Kroger’s primary duty is to generate a return for investors, not to seek good headlines. I’d say that the bigger issue isn’t store closures, but greater scrutiny around the botched merger and the resignation of the former CEO. That is something that may generate bad headlines as well as upset investors.
Supermarkets form deep roots in the communities they serve. They see their customers frequently, support their communities and provide the valuable service of feeding their customers. Because of the close ties developed, when circumstances lead to a supermarket store closure, the community takes it hard; whether Kroger or any other supermarket. Much harder than for most other store closures.
As Neil noted in his comment, pruning underperforming locations is part of running any business.60 stores looks like a lot, but 60 stores is only about a 2% trim in stores for Kroger. That’s a pretty surgical reduction.
Kroger’s failed merger with Albertsons and Rodney McMullen’s abrupt resignation in early March frame the company’s path forward as they search for the next CEO. The store closures, combined with the recently announced corporate layoffs, exacerbate the company’s relationships with its stakeholders. Successful grocery stores are integral to the communities they serve, from employees to customers, and from volunteers to local fundraising efforts. You can’t surgically extract a store with a scalpel; the longer a store has been open, the more pervasive its community’s connective tissues become. For Kroger, the company needs to carefully evaluate its decades-long investments through thoughtful and nuanced stakeholder analysis, rather than relying solely on spreadsheet-driven shareholder assessments.
The future CEO will need to adopt a strategy that more carefully balances shareholder demands for profitability with the long-term, community-centric investments essential to the grocery business’s health and stability. These investments should aim to rebuild trust, operational excellence, and foster community engagement.
Where customers are not directly affected, the store closings will be fairly insignificant. However, there are at least two small exceptions.
1) PR will suffer in the neighborhoods that are losing stores.
2) Consumers will worry that closure might next to come to their store.
Store closures are common these days, but it is important for retail chains to do a thoughtful job of explaining the reasons, and reasons, why not.
Groceries are among the more vulnerable for two (rather obvious) reasons:
(1) They’re something pretty much everyone uses
(2) They’re a necessity; how much of a necessity depends on how many other options someone has open to them (which is to say the sole supermarket in a small town is more of an issue than a suburban area w/ five stores nearby)
There’s probably little than be can done to completely avoid fallout, so the best goal is to minimize closing them in the first place; translation: allowing a store to degrade, or buying a competitor and then closing them will certainly draw condemnation… deservedly so IMO.
A publicly held company has pressure to keep shareholders happy. It’s part of the company’s responsibility to be profitable. As a result, sometimes difficult decisions are made that affect both customers and employees. I’m sure it isn’t Kroger’s goal to upset its customers and employees, but unfortunately, that happens. That said, there are strategies that include a focus on community that go beyond profit that can be considered. My question is if “under performance” means a loss, or does it mean it’s just not as profitable as the brand would like to be?
So let me get this straight….kroger has 2,719 stores and they’re closing 39 because they’re underperforming. Why is this news? I just think the times we live in are getting whackier and whackier.
between this and the Cracker Barrel fiasco (maybe it would have been a more interesting story if they’d just changed their name to Barrel and left the man sitting there), I’m deciding the country is going mad,
PS. Their introduction of themselves to South Florida with no store and all private label store deliveries was a dumber move. The marketing message? We have refrigerated trucks. That’s baseline, baby
There’s no smooth way to soften the blow of store closures. And Kroger needn’t worry about the goodwill of their clients when it wasn’t sufficient to keep a store open.
Anytime grocery stores are closed and without a new or remodeled one to take its place, its a net-negative on several layers. The community loses out on an important anchor, as do dozens of jobs, vendors and local retail tax revenue. A hub of sorts is now gone. And shortly after, a vacant building sits as boarded up, which never looks good in the neighborhood. Hopefully another player comes forward for these empty sites, for the sake of the community and another operator to perform better.
The only upside for Kroger here is the shareholders.
For a grocery chain as large as Kroger, these few store closures are barely a blip from a national news perspective. Shareholders want their investments to be prudently managed, and pruning the dead wood is a tried-and-true business tactic.
Taken individually, however, a single large supermarket is a community anchor, typically accounting for 50 or more FTE jobs and driving half a million or more in sales each week. In smaller communities and some urban settings that store may be an essential distributor of food and household items. It may be a sponsor of the local Little League and an important advertiser in local media. No wonder there has been a hue and cry.
In the era of social media, regular folks (including store employees and union members) have learned how to air their local grievances using the national megaphone. When a community faces a loss due to a corporate decision, it is normal to appeal to the national conscience and try to change things.
I’d venture that Kroger management knew full well it would be publicly criticized for shuttering these stores.
Companies are not charities.
Is the premise that the merger was going to save these stores? By what miracle? Were these stores owned or leased? How will these properties be monetized in their next life? And that’s going to be easier, and more profitable than finding a way to keep a grocery store open? A store with guaranteed daily customers, even if low in count? There was no mixed-use solution that would have prevented the creation of a food desert…???
Kroger needs to take a step back, on a regular basis, and cull their underperforming stores. This is smart business, raises the profile of access to a Kroger store in the consumer’s mind. It also elevates the corporate stock position, and demonstrates good principles in managing their business.