The most revealing sign of problems in the grocery sector is the trend in identical-store sales. For the country’s biggest supermarket operators, revenue growth from existing locations has stalled or fallen, revealing deeper difficulties as the industry faces intensified competition from discount chains and mass retailers.
Kroger’s sales growth nearly disappears
Kroger, the nation’s largest supermarket chain, reported a 0.2% rise in comparable-store sales during its most recent quarter—a figure so minimal it offers little evidence of meaningful expansion. The company’s performance has worsened across four consecutive quarters, with the latest result dropping from 1% in the prior period and more than three percentage points below the same quarter in 2025. Despite efforts to draw customers, including promotions on staple items and store renovations, the chain has failed to reverse its decline.
Kroger’s struggles reflect broader industry weakness. Ahold Delhaize’s U.S. grocery divisions also posted weak comparable-store sales, falling below 1% in recent earnings reports. Albertsons compounded its challenges by reporting a decline in same-store sales for the most recent quarter, deepening its difficulties in competing on pricing.
Sprouts’ growth collapses after early gains
Even specialty grocers like Sprouts Farmers Market, which once achieved double-digit same-store sales growth in early 2025, have seen their performance deteriorate. The chain’s metric has turned negative over the past two quarters, illustrating a broader consumer shift toward retailers perceived as offering better value. Traditional grocers, even those positioned as premium, are losing ground as shoppers prioritize affordability.
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Michael Infranco, assistant vice president at RetailStat, described the situation bluntly: When revenue fails to grow, controlling costs becomes critical to maintaining profitability. The financial pressure is clear: with sales stagnant, grocers have fewer funds available for wage increases, store upgrades, or price cuts, the very investments needed to keep customers.
Discount and mass retailers gain share
While traditional grocers struggle, dollar stores and mass retailers are expanding their lead. Dollar General and Dollar Tree both reported at least 3.5% growth in same-store sales, with strong performance in consumable products. Walmart’s grocery comps remained in the mid-single-digit range, reinforcing its status as a low-cost shopping destination. Target’s food and beverage sales also exceeded expectations in recent periods.
The divide between traditional grocers and their competitors has widened. Where Kroger and Albertsons battle to maintain growth rates below 1%, Walmart and dollar stores are increasing their market position. The shift extends beyond pricing alone, traditional grocers have lost share in high-margin categories like fresh produce to mass merchants and warehouse clubs. Even routine items such as eggs, whose prices have dropped this year, have contributed to weaker sales in grocery departments.
A further complication is the decline in pharmacy revenue. Federal reimbursement reductions have squeezed a key profit source for many supermarket chains, further reducing margins at a time when financial pressure is already intense.
