Kroger says its digital transformation continues to be a driving force in the company’s growth strategy.
In 2024, digital sales grew 11 percent to surpass $13 billion, reinforcing the importance of e-commerce in Kroger’s financial performance. To enhance profitability, Kroger is prioritizing automation, advanced technology, and improved operational efficiencies, including density and volume optimization.
Notably, the fourth quarter delivered the company’s strongest digital profit improvement to date, highlighting the success of these initiatives. Kroger did not reveal the size of its profit from online business. But the total operating profit of Kroger has touched $3.8 billion in 2024.
A key component of Kroger’s digital strategy is its Seamless ecosystem, which serves as a powerful growth accelerator. Digital households demonstrate greater brand loyalty and spend nearly three times as much as non-digitally engaged customers. The increasing number of digital customers also fuels Kroger’s high-growth, high-margin alternative profit businesses, including health and model-based revenue streams.
Delivery Solutions emerged as a standout performer, leading digital sales growth with an 18 percent year-over-year increase (excluding the 53rd week). Strong demand across the Kroger delivery network resulted in higher household engagement and increased traffic, underscoring the premium experience provided by the company’s delivery service. This positive consumer reception is reflected in consistently strong Net Promoter Scores (NPS).
Additionally, Kroger has been leveraging technology to address broader operational challenges, including shrink reduction and organized retail crime. The integration of technology-driven solutions enhances sell-through rates and loss prevention measures, ensuring a more efficient and secure retail environment.
With a clear focus on innovation, automation, and digital expansion, Kroger remains committed to sustaining its digital momentum while optimizing profitability and enhancing customer experiences.
Rajani Baburajan
