Image Courtesy of Kroger
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."