In
the annals of American grocery retail, few stories are as instructive—and
cautionary—as that of the Great
Atlantic & Pacific Tea Company, better known as A&P. Once the
undisputed king of American supermarkets, A&P’s spectacular fall from grace
offers a blueprint for how even giants can crumble under the weight of
complacency, outdated strategy, and an evolving consumer landscape.
Now,
as Kroger Co.—currently
the largest traditional supermarket chain in the U.S.—announces plans to close
60 underperforming stores, the industry is left to ask: Is Kroger going the
way of A&P?
A&P and Kroger: Titans from Different Times
In
its heyday, A&P was the Amazon of food retail. By the 1930s, it operated
over 16,000 stores and pioneered the self-service grocery format. But by the
1970s and 1980s, its lack of innovation, poor real estate strategy, and failure
to adapt to emerging consumer trends (like big-box and discount formats) led to
a slow, painful decline. A&P filed for bankruptcy not once, but twice—first
in 2010, and again in 2015—before disappearing completely.
Kroger,
meanwhile, has been a 21st-century survivor. With 2,731 stores across 35 states
and Washington D.C., it has outlasted many peers through acquisitions,
data-driven loyalty programs, and strategic investments in private label and
ecommerce. But recent developments, store closures, leadership changes, and
stalled national ambitions—suggest troubling echoes of A&P’s demise.
A House of Brands or a House Divided?
Kroger
operates under a portfolio of 18 regional banners, including Ralphs,
Fred Meyer, Fry’s, King Soopers, Harris Teeter, Smith’s, Mariano’s, and others.
While each banner retains local equity, this fragmented structure has become a
liability in today’s era of unified, brand-driven storytelling and national
scale branding.
From
Steven Johnson, the Grocerant
Guru® at Tacoma, WA based Foodservice Solutions® perspective,
this “shallow brand vision” lacks the clarity and cohesion modern
consumers expect. “Kroger has too many names and not enough identity,” Steven Johnson
explains. “They’re trying to sell yesterday’s brand to today’s customer—and in
the process, losing relevance. Each banner competes for attention in
overlapping markets, muddying the message, duplicating operational costs, and
leaving customers confused about what Kroger stands for.”
This
regional patchwork may have made sense in a brick-and-mortar past. But in a
digital-first, convenience-driven world where food discovery, value, and brand
trust are national—and increasingly, personalized—Kroger appears out of sync.
The A&P Syndrome: Are the Signs Emerging at Kroger?
Kroger’s
planned closure of 60 underperforming stores in the next 18 months is not just
a cost-cutting move, it’s a wake-up call. These closures, combined with the
$100 million impairment charge, come after its failed merger with Albertsons
and the abrupt departure of its long-time CEO.
The
parallels to A&P’s decline are too close for comfort:
|
Metric |
A&P (pre-decline) |
Kroger (2025) |
|
Store Count |
>16,000 in 1930s → under 300 at end |
2,731 now, with 60 planned closures |
|
Brand Strategy |
National name, but stale execution |
18 disjointed banners with no unified national brand |
|
Consumer Connection |
Faded relevance, no innovation |
Over-reliance on legacy formats, slow to embrace grocerant trends |
|
Ecommerce |
Never evolved |
15% growth but still unprofitable |
|
Innovation |
Underinvested in format and tech |
Behind on customer-facing digital and meal solution trends |
Kroger by the Numbers: Strong Sales, Shaky Focus
Kroger’s
Q1 2025 performance paints a mixed picture:
·
Sales:
$45.12 billion, up 3.7% YoY
·
Identical-store sales (ex-fuel):
+3.2%
·
Net income:
Down 8.6%, to $866 million
·
Gross margin:
Improved to 23% (from 22%), thanks to divestitures and supply chain gains
·
Ecommerce:
+15% growth but remains a loss leader
·
Store closures:
$100 million impairment tied to shuttering 60 stores
These
results reflect some operational discipline but also highlight a brand that’s focused
more on spreadsheets than shoppers.
The Grocerant Guru® Speaks: “They’ve Lost the Plot”
Steven
Johnson, the Grocerant Guru®, is blunt: “Kroger has lost focus on the customer.
They’re optimizing stores while customers are optimizing Time. Convenience, Prepared
meals, Digital engagement, and Brand trust drive growth today—not simply store
count.”
He
continues, “Kroger is operating like a holding company of legacy names, not an
integrated brand with forward-looking consumer relevance. While competitors
like Costco build national loyalty and Aldi cultivates discovery and
simplicity, Kroger is running 18 micro-strategies in 35 states.”
Johnson
argues that Kroger has failed to lean into food as experience. “Their private
label expansion is solid. But they need more meal solution stations, better
mix-and-match bundling, improved fresh offerings, and grocerant zones.
Otherwise, they’re letting Wawa, Amazon Fresh, and even Dollar General eat
their lunch.”
Today’s Consumer Isn’t Waiting
Modern
grocery shoppers:
·
Shop more frequently, but spend less
per trip
·
Buy private label and bulk formats
·
Avoid discretionary purchases
·
Crave convenience, flavor variety, and
digital-first options
·
Migrate to brands with strong unified
messaging
Kroger’s
response—more Simple Truth SKUs, some ecommerce consolidation, and 30
remodels—may not be enough.
Final Thought: A&P Redux or Kroger Reinvented?
Kroger
isn’t A&P—yet. But the seeds of similarity are undeniable: overextended
branding, internal complexity, stale vision, and a dangerous disconnect from
today’s customer.
As
Johnson concludes, “Kroger has scale, history, and talent. But if it keeps
managing the past instead of innovating for the future, it won’t be tomorrow’s
grocery leader—it’ll be a case study in what went wrong.”
Kroger’s
fractured banner strategy, leadership void, and outdated market-by-market model
are haunting echoes of A&P’s demise. To avoid history repeating itself,
Kroger must unify its brand, modernize its experience, and refocus relentlessly
on what today’s food shopper really wants.
Are you ready for some fresh ideations?
Do your food marketing ideas look more like yesterday than tomorrow? Interested
in learning how our Grocerant Guru®
can edify your retail food brand while creating a platform for consumer convenient
meal participation, differentiation and individualization? Email us at: [email protected] or visit: us on our social media sites by clicking one of the
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