Kroger was founded in 1883 when Barney Kroger invested his life savings of $372 to open a grocery store at 66 Pearl Street in downtown Cincinnati. From its inception, the company pioneered a vertical integration model that combined grocery retail with in-house bakeries and meat departments—a format that later became standard in American supermarkets. In 1901, Kroger became the first grocer in the country to establish its own bakeries. This approach gave Kroger control over quality and pricing while reducing costs passed along to customers. The company also pioneered private-label manufacturing, initially creating sauerkraut from locally sourced cabbage to serve its German customer base in Cincinnati. Over more than a century, Kroger grew from a single neighborhood store into one of the largest grocery retailers in North America, operating under multiple banners and serving millions of shoppers across dozens of states.
Today, Kroger is distinguished by its multi-banner structure, maintaining separate regional identities while leveraging corporate scale in purchasing, merchandising, and supply chain operations. The company operates grocery, pharmacy, fuel, and general merchandise under banners including Kroger, Fred Meyer, Ralphs, Smith’s, Harris Teeter, King Soopers, Fry’s, and QFC, among others. A significant portion of its revenue comes from private-label brands, which represent about a quarter of store sales. Kroger also operates food manufacturing facilities that supply roughly 40 percent of its own-brand products. The company operates as a publicly traded corporation on the New York Stock Exchange and serves as an employer of hundreds of thousands of workers, many represented by the United Food and Commercial Workers union.
Origins and Early Growth
In 1884, Barney Kroger bought out his partner and opened a second store. By 1902, with 40 stores and $1.75 million in annual sales, The Kroger Grocery and Baking Company was incorporated. In 1904, Kroger bought 14 Nagel meat markets and a packing house, bringing meat and groceries under one roof for the first time. On the company’s 25th anniversary in 1908, 200 horses and wagons were making regular store deliveries, and Kroger’s growing chain numbered 136 stores in Cincinnati, Dayton, Columbus and northern Kentucky.
In 1912, Kroger expanded with 25 stores in St. Louis. The early decades of the twentieth century saw sustained growth driven by the company’s commitment to low prices and operational efficiency. In the 1930s, the company became one of the first grocery chains to conduct routine quality checks and scientifically test foods. Although Kroger initially resisted the supermarket format, the company eventually embraced larger, self-service stores with expanded departments, positioning itself for mid-century retail competition.
Expansion, Acquisitions and Ownership
In 1983, 100 years after the company’s founding, Kroger merged with Dillon Companies Inc. in Kansas to become a coast-to-coast operator of food, drug and convenience stores, bringing Dillon’s, King Soopers, Fry’s, City Market and Gerbes into the Kroger family. This watershed deal established Kroger as a truly national operator and set the template for expansion through acquisition that would characterize the company’s subsequent growth.
The biggest merger in Kroger’s history came in 1999, when it merged with Fred Meyer, Inc. (owner of Smith’s Ralphs, Food 4 Less and QFC), and that year it also merged with JayC, Owens Market and Pay Less. The Fred Meyer acquisition in particular brought major multi-department store formats and powerful regional banners into the fold, dramatically expanding Kroger’s geographic reach and product offerings. In 2001, Kroger merged with Baker’s, followed by mergers with Harris Teeter in 2014 and Roundy’s, Pick ‘N Save, Metro Markets and Mariano’s in 2015, expanding its reach through the Mid-Atlantic states and the northern Midwest.
In 2014, Kroger merged with Vitacost.com, one of the largest pure e-commerce companies in the nutrition and healthy living market. This transaction signaled the company’s commitment to building digital capabilities alongside traditional store operations.
In October 2022, Kroger entered into an agreement to acquire its rival Albertsons for $24.6 billion. On December 10, 2024, a U.S. district judge agreed with the FTC that the merger would risk reducing competition at the expense of both consumers and workers. A coalition of UFCW locals helped defeat the largest proposed grocery merger in US history between Kroger and Albertsons. The failed merger represented the most significant strategic setback in recent company history, as Kroger had planned the deal to strengthen its competitive position against Walmart and other mass retailers.
Stores and Regional Footprint
Kroger operates stores across a broad geographic footprint spanning the United States, with particular concentration in the Midwest, South, and Southwest. Stores are distributed across 35 states and the District of Columbia, encompassing various banners and divisions including Fred Meyer, Ralphs, Fry’s, and King Soopers, among others. The company operates distinct store formats suited to regional markets, from small convenience stores to large multi-department locations. Together, Kroger and Roundy’s operate 2,774 supermarkets and employ more than 422,000 associates across 35 states and the District of Columbia. (That figure reflected the company’s size following the completion of the Roundy’s acquisition in 2015; current store count and employment figures are tracked separately in the Key Facts section.)
Kroger operates 35 food manufacturing facilities that make everything from bread, cookies and milk to soda, ice cream and peanut butter. These facilities are strategically distributed to serve regional distribution networks and support the company’s own-brand product strategy. About 40% of private-label items found in the company’s stores today are made at one of Kroger’s manufacturing plants.
Merchandising and Own-Brand Products
Private-label brands are central to Kroger’s strategy and financial performance. Private-label products account for an impressive 26% of Kroger’s total store dollar sales, providing the company with a significant strategic advantage. Kroger’s store brands accounted for over $32 billion in sales in 2024. The company operates multiple private-label tiers targeting different consumer segments and price points.
Kroger’s Simple Truth line, which celebrates 10 years of operations, holds the distinction of being America’s No. 1 organic and free-from brand. Kroger credits the success of Simple Truth to affordability, accessibility and simple ingredients, with the brand offering more than 1,500 products that are free from 101 artificial colors, flavors, preservatives and sweeteners, and containing no artificial ingredients. In 2021, the company announced it would sell carbon-neutral, cage-free eggs under its Simple Truth line as part of a partnership with Kipster Farms. Two years later, Kroger announced the private brand added two upcycled-ingredient breads to its product lineup in an effort to offer more sustainable items. The Simple Truth brand has consistently evolved to reflect consumer priorities around health, sustainability, and clean ingredients.
In addition to Simple Truth and the core Kroger brand, the company offers Private Selection for premium consumers and a range of other own-label products spanning hundreds of categories. Simple Truth Protein includes over 80 high-protein meals and snacks and marks the grocer’s largest product expansion to date. Kroger’s private-label strategy has been central to its ability to maintain margins in a competitive industry and to respond to evolving consumer preferences.
Employment and Labor Relations
Kroger employs unionized staff at approximately two-thirds of its locations, as reported by the UFCW, with the remaining third operating without union representation. UFCW Local 911 in Ohio and other locals across the country represent Kroger workers, with recent contracts establishing wage scales and additional personal days. Unionization is concentrated in certain geographic areas and among established store banners, with newer or non-union markets representing the non-unionized portion of the workforce.
In 2022 and 2025, UFCW Local 7 took strikes against Kroger’s stores in Colorado to challenge their unfair labor practices. A January 2022 strike in Colorado and massive preparations for strikes in the west in the states of California and Washington contributed to significant gains in wages. In 2025, unionized Kroger workers across Indiana rejected a tentative contract, with three-quarters (74%) voting no. Labor disputes in 2025 centered on staffing levels, wage adequacy, and healthcare benefits, with unions arguing that Kroger maintained inadequate staffing despite rising workloads. King Soopers workers set to strike the chain across the state beginning February 6, 2025.
Kroger retaliated by closing stores in Seattle, LA and Long Beach, the very cities where hazard pay had been passed. This move by the company during the pandemic generated significant controversy among labor representatives and community advocates. A coalition of UFCW locals collectively coordinated contract negotiations in 2022 and underwrote the “Hungry at the Table” report by Economic RoundTable that exposed the high levels of homelessness and hunger of Kroger workers. The report highlighted the disconnect between company profitability and worker financial security, becoming a flashpoint in wage and benefit negotiations.
The Economics of the Business
Kroger operates in the notoriously thin-margin grocery industry, where scale, purchasing power, and operational efficiency are paramount. The company’s strategy has centered on leveraging its size to negotiate favorable supplier terms, controlling costs through vertical integration and private-label manufacturing, and driving volume through competitive pricing and omnichannel convenience. David Dillon, who led Kroger’s development of the company’s successful Customer 1st Strategy, retired as chairman on December 31, after 38 years of service, and the Kroger Board elected Rodney McMullen, Kroger’s chief executive officer, to the additional post of chairman commencing on January 1, 2015. McMullen joined the Company in 1978 as a part-time stock clerk.
Rodney McMullen’s tenure as CEO has been marked by significant achievements, including the expansion of Kroger’s digital capabilities, the growth of its private-label brands, major acquisitions of Harris-Teeter, Mariano’s, Roundy’s and strategic investments in supply chain efficiency. McMullen noted that Kroger’s most profitable customers shop both in store and online, with customers who shop both in-store and online spending three to four times more compared to in-store-only shoppers. This insight drove the company’s strategic investment in digital infrastructure, fulfillment centers, and seamless omnichannel integration.
Rivals and Market Pressures
Kroger’s principal competitors include Walmart, which leads the overall retail grocery market by share and scale; Costco Wholesale, a membership-based format that captures significant food spending; Amazon, which has entered grocery through Whole Foods and other channels; and numerous regional and discounter operators. As Kroger has grown through acquisition, it has increasingly challenged Walmart’s dominant position in the industry. The grocery industry faces structural headwinds from e-commerce growth, shifting consumer preferences toward convenience and fresh/natural products, and the entry of non-traditional competitors.
Kroger’s merger attempt with Albertsons reflected strategic anxiety about scale and competitive positioning. Both companies argued that the combination would yield cost savings and price reductions that would benefit consumers and help the combined entity compete more effectively against Walmart and other giants. However, regulators and labor unions opposed the deal on antitrust and labor grounds, viewing it as a further consolidation of an already concentrated industry that could harm workers and consumers.
Later Developments and Direction
Kroger’s CEO Rodney McMullen resigned following weeks of labor disputes and months after the company’s attempted $25 billion acquisition of rival Albertsons was blocked by district and state courts on anti-competition grounds. Ron Sargent, interim CEO of Kroger, stated during the company’s June 2025 earnings call that “unfortunately, today not all of our stores are delivering the sustainable results we need.” In June 2025, the company revealed that it would be shuttering around 60 stores across the U.S. over the next 18 months. Kroger said in June it had plans to “accelerate new store openings in 2026 and beyond.”
The failure of the Albertsons merger and the subsequent leadership transition forced Kroger to recalibrate its strategy and operations. The company faced immediate challenges including labor disputes over wages and staffing, store closures to improve portfolio efficiency, and the need to prove it could compete effectively as a standalone entity without the scale advantages a merged company would have provided. In a memo obtained by Bloomberg in August 2025, Kroger said it would be laying off 1,000 corporate employees as part of its wider push for efficiency. The company’s focus shifted toward optimizing its existing store footprint, investing in digital capabilities, and reinforcing its private-label strategy as the primary lever for margin improvement and customer loyalty.
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