Dive Brief:
- Kroger plans to cut its corporate workforce by approximately 3,000 jobs over the next three years, according to a memo from CEO Greg Foran that the grocer shared with Grocery Dive. Decisions about impacted roles will be communicated starting in the coming months, he added.
- Foran wrote that the company has “more layers, more handoffs and more overhead than we need.” He also noted in the memo that the company will take advantage of technology that can boost efficiency and reduce duplicative work.
- The effort builds on goals Foran outlined earlier this year to lower prices and make Kroger more capable of competing with giants like Costco, Walmart and Amazon. “Our business is becoming leaner, more focused and more competitive,” the CEO wrote in the memo. “We are working to be more agile; more precise in our execution; and deliver benefits to our customers, associates and our shareholders.”
Dive Insight:
Foran said Kroger has made strides in lowering prices, improving the shopping experience and becoming a leaner organization in recent months. But he indicated that the company’s structure and staffing are still far too complex to allow it to continue making progress on these fronts.
“We have the opportunity to make changes that will create broader roles and faster decision making,” Foran wrote. “This lets us move vital resources closer to the customer to lower prices, invest in our associates and create a better shopping experience.”
Foran didn’t provide a specific timeline for layoffs or say which company departments will be impacted. He said the cuts will allow the grocer to further invest in its associates.
Since taking over as CEO in February, Foran has consistently said that Kroger needs to bring down its prices and offer a more compelling shopping experience in what’s become a ruthlessly competitive industry. Recent data shows the grocer’s market share declined recently while value-focused competitors like Walmart, Costco and Aldi have increased their shares.
Kroger told Bloomberg in May that the grocer planned to implement price cuts across its stores. The same day that story came out, Walmart announced it had expanded its price cuts to more than 7,000 items.
Since Foran’s arrival, the grocer has made key changes recently to its C-suite. In August, the company named former Walmart executive Nate Faust as its first e-commerce chief. Less than a month later, it tapped another former Walmart leader, Mark Ibbotsen, as chief store operations officer. Kroger also recently named a new chief people officer as well as a chief data and AI officer.
Kroger is also still battling with rival Albertsons over their failed merger nearly two years ago. Albertsons wants to claim at least $8 billion in damages from Kroger, which Kroger claims Albertsons is not entitled to. The trial is slated to start Oct. 19 in Delaware.
Catherine Douglas Moran contributed reporting.
