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2026.09.22 | TB | Retail | Kroger Competitive Update

原标题：Kroger – Grocery Retail Competitive Update & Growth Outlook

#consumer

Third Bridge · 2026-09-22

Analyst-led • 10 Sep 2026

Companies: KR US, TGT US, WMT US, GIS US, OCDO GB, ACI US

Guy Burgstahler (GB) Independent Consultant

John Oh (JO) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

JO: Welcome to Third Bridge's Interview entitled Kroger – Grocery Retail Competitive Update & Growth Outlook. I am John Oh, and I will be facilitating today's Interview with Mr Guy Burgstahler, former Senior Director at The Kroger Company.

Before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

GB [00:00:24]: I agree.

JO [00:00:25]: Thank you. Could you please begin with a brief introduction to your background?

GB [00:00:31]: Sure. Guy Burgstahler, tenured executive for a variety of high-performing category-dominant brands, mainly in the omnichannel retail space over the years. Started my career in agencies, marketing agencies and moved into the corporate world and had successive growth and executive opportunities along the way. Most recently with the Kroger companies, running a subsidiary of Kroger's called Vitacost, USD 500m e-commerce health and wellness marketplace with direct ties to Kroger marketing, merchandising, operations and such. Through that relationship, which I was involved with for nearly 10 years, had the opportunity to work very closely and deeply within the Kroger executive organisation, helping to influence decisions on a variety of subjects and initiatives over the tenure of my time there. Sorry, I'll add, recently, Kroger sold Vitacost. I led the acquisition campaign. It was sold. The deal closed on 9 January 2026. That closed out my time with Kroger, although through the integration and implementation process with the acquiring company, there was a lot of communication still with the Kroger executive team that I had with the Kroger executive team.

Questions

[00:02:16] What are your thoughts on the overall US grocery retail industry, highlighting 2-3 key trends that are impacting The Kroger Co and the industry?

GB [00:02:47]: A lot of new competition, especially in the value area, as you alluded to in some of your questions, has put a lot of pressure on more of the mass-market grocers like Albertsons and Kroger and Publix and even Wegmans and the like. What has happened is the shift… It's this very interesting phenomenon that is happening because of the economic state and the healthcare industry in general, where consumers have shared openly insights and perspectives around their concerns over their health and wellness and how difficult it is on the medical side to manage that these days through insurances, the complexities of insurances, the difficulty with seeing practitioners and the like. They've turned… A lot of consumers have turned to a more self-centred approach to their own health and wellness, and nutrition is one of the key components, one of the key pillars of that. The grocery industry has seen this evolution of customers, the mass-market customer looking for healthier, better-for-you options at a good cost or at a relevant price.

That's where the other economic factor has come in to where groceries have gotten so expensive and especially the better-for-you groceries, the fresh foods, meat, seafoods, poultry, vegetables, fruits, things of that nature, have gotten so expensive that it's left this opportunity for value proposition grocers to move in who offer a limited assortment of products, but a decent quality assortment of products at a really good price point. What we've seen in the grocery industry overall, again, overarching is the centre store is becoming more and more constricted and more and more pressured and the perimeter store is getting more and more attention. That's where… I'll use Walmart as an example, where people used to be okay shopping their processed goods at Walmart because cereal, Cheerios, is Cheerios no matter where you buy it. The reluctance to shop a Walmart grocer was in the fresh items. Walmart has seen this. They've totally picked up the pace in terms of their offerings of fresh items. Not only are they price point competitive now, but their quality of better-for-you products has increased dramatically, which has put a lot of pressure on the Krogers, the Albertsons, the Publix, the Wegmans and such.

That's been the trend that we've been seeing. The last thing I'll say about Kroger specifically, and I know we're going to get more into this in some of the subsequent questions that you have here. Kroger specifically has just not figured out what their position in the marketplace is or should be. They have not figured that out. It's frightening for me to say that a grocer that size, a company that size with over 100 years in business, whatever. I firsthand can say that they literally have no clue what their position is right now. When I say right now, again, not going too deep, but from the time that I left and I've obviously continued to study, they've gone through a lot of executive changes, as you know. That has put a lot of new pressures, not only on the mechanics of the business, but the structure of the organisation as well. In my humble opinion, the Krogers, the Albertsons, the that mass-market-type grocer is really hurting. I don't see that trend changing in the foreseeable future unless they reinvest and Kroger specifically, who I know the most about and Albertsons, to be honest, but unless they choose to invest in a position that they can viably own.

Kroger tried that. In 2019, we hired Dentsu as an agency. We built and launched this big campaign based on Fresh for Everyone, which was a great in concept in that it was basically saying a value prop, the for everyone was the value prop, no matter what economic status you're in. The fresh was the focus on the fresh goods, but just not able to carry it out in a way that made it believable for the customer. That's an operational issue, and that's a priority and focus issue that Kroger has had. They put this out there and invested millions of dollars in this positioning to own the better-for-you, the fresh space and then just we're not able to execute. I can go into more details into the mistakes or the situations that that prevented them from doing that in future questions. The overall market is leaning heavily towards smaller grocers with limited assortment, and that is more to eliminate the noise and confusion over having 15 different ketchups to choose from. Like people are annoyed with that these days. Then these value discounters or these high-low discounters like Kroger, who have made the promotional concept so complex that I don't even understand what I have to do to get the discount anymore.

The overwhelming assortment, which they have not gotten under control, the complexity of the promotional messages, which have also added noise and confusion. The fact that I can't get that discount or that promotion or that cheaper price unless I allow you to take all my information and study me, all of those things have created annoyances and frustrations within the customer base, whereas the Walmarts as an example, or the Whole Foods as an example or the Aldis as an example, have simplified that process. They've simplified the assortment. They've simplified the pricing structure. They've simplified the loyalty programme to make it accessible in a much, much easier and more convenient way. They've simplified, if not eliminated the promotional factor by either going everyday low price or simplifying the offer. All of those things combined with the fact that the quality of products, especially in the fresh goods area that the Whole Foods, that the Walmarts, Aldis, they've increased their quality of fresh goods.

Now you have this this kind of shift that you're seeing in the consumers' mindset, they're willing to drive the extra mile to go to the Trader Joe's, to go to the Whole Foods, than to shop at what would be geographically more convenient, Vons, Kroger, Albertsons, whatever. The one grocer, and then I'll shut up here, I'll let you continue on. The one grocer that really seems to have been able to thrive through this that kind of falls in that space is Wegmans. In large part, it's because Wegmans operationally has just done such an amazing job of being customer-centric that they've built. They've built loyalty not through price and item or not through promotion. They've built loyalty, built loyalty through customer service and customer-centric-operating model. They've been able to manage through this. We put them in kind of a little bit of a different camp. The others in this space to me are… They're in jeopardy of continuing to lose share.

[00:11:30] You mentioned that Kroger faces a few gaps compared to its competitors, such as Walmart, whether that's in price, the fresh and better-for-you assortment, in-store experience, etc. Of those gaps, what might be addressable over the near term for Kroger and what might be more structural in nature that could take longer to improve upon to close the gap with value competitors?

GB [00:12:44]: Speaking from internal experience, if I was Foran right now, my entire focus would be on fixing the internal organisation of Kroger, both at the store level and at the corporate level. The reason for that is because there is tons of discontent within both environments, within both organisational ecosystems. There's tons of discontent at the regional level and at the store level, and there's tons of discontent at the corporate level. A lot of that is because of the upheaval of executive changes that have been made, the cloud, the grey cloud of what happened with McMullen. All of that and the union situation, there's this discontent at both the store level and the corporate level that reflects back on the consumer experience. It's very real. Nothing that they do to update the aesthetic of the store or even the quality of the merchandise or even changing the price and promotion game, none of that will matter as much as having an associate pool that is re-energised, that feels valued and cared for and respected and trusted because that will have an immediate reflection on the consumer.

That's a lot of work, and that is… When you have 3,500 stores across a variety of banners and regions, and that is no easy task, and that's going to take time. If they don't do that, forget it, like the market share loss is going to continue to happen. Again, do I have an answer for that? I have thoughts on how to go about it, being part of that discontent for several years. It is a very, very complex undertaking and something that they have literally avoided for quite a long time. Now I think with Foran, it's up in the air about how does he think about this and what is he going to… What path is he going to take? That is the biggest opportunity that Kroger has because it can change the game in terms of the customer's perspective on the brand. Operationally, Kroger is a well-oiled machine. There's always room for improvement, obviously, but they do an excellent job from a store operations and e-commerce operations perspective. They're able to because they're very analytical in terms of measuring all the different dials that need to be turned from an operational perspective, whether that's front-end and back-end logistics, whether that's shopper engagement, like they're very analytical in that and have the tools and the resources to turn those dials as necessary.

Operationally, they're very strong. From a customer-centric brand perspective, they just haven't figured it out. That's one area that I would be focusing on. The next that they could address very quickly is simplifying the promotional model. It is so complicated. You got to buy five to get four. There's 30 different promotion types running at any given point in time. I'm maybe exaggerating, but not really. Figuring that all out for the customer when I can walk into a Smart & Final for, as an example, or a Walmart or an Aldi and just know that I'm getting the lowest price possible and not have to deal with any of that stuff. That's what the consumer is looking for right now. They're looking for simplicity and value, like trust in the value they're getting. By running all of these complicated promotions on top of promotions on top of promotions, it's really confusing for the customer and the customer is turning away to that. Kroger has been a high-low model for 100-plus years. I'm not even recommending or saying they should change that, but there's many aspects within that model that could easily be simplified without losing their sponsorship dollars from CPGs, but just simplifying the message to the customer. That is something that they could address rather quickly.

Then the other thing, as I referenced earlier, is Kroger touts that it is investing in new brands and innovation and whatever, but they're really not when it comes to the shelf. Part of that is because the large CPGs, they just can't release their clutch on the large CPGs, the PepsiCos, the Mondelēz, the Unilevers, like they're so dependent on those large CPGs that they can talk about it and they can say it to the customer, but it's not showing up, like the ability to carve some space out for innovation to showcase exciting new trends or items. They're just not doing that effectively. They say they want to, they say they're going to. When push comes to shove, those large CPGs just own the aisles, and they're so dependent on the dollars they receive that they can't break the chain. That is an opportunity, though, because there are ways to do that within an environment, within an ecosystem like Kroger's, there's a way to do that. They just haven't addressed it appropriately from what I've seen. There's so much innovation and excitement out there in the food category, in the supplement category with better… What used to be processed foods turning into more fortified or enriched foods. There's so much excitement in that space. That's what Vitacost was, like we focused in that space.

For Kroger to introduce that more into their store and e-commerce experience would be really beneficial because the consumer, they want that. In addition, running alongside of that, and this is what I was referencing earlier. One of the ways to do that is to really rightsize the assortment overall. In very simple terms, go more to a good, better, best strategy when it comes to your assortment than offering everything out there. Part of that rationale is because the big CPGs control so much of the store, if they bring a new product in, they demand that it gets put on the shelf. The consumer gets confused. I'm referencing this half jokingly, but you go down the condiment aisle and do I need 16-20 choices of ketchup, do I need that as a customer? The answer is no. It used to be thought of as like this is a benefit to the customer. Look at all these choices we have. Now the pendulum has swung so far, the customer is saying, just give me good, better, best, just give me high, medium, low. Let me make a decision in a much more simplified and structured manner than having to wade through 17-20 different choices of a commodity. That, to me, is another area that they could address and they could address it strategically, tactically and effectively. Yes, that would be another one.

Simplification of their promos and the simplification of their assortment. The interesting thing, and sorry for the ramble, but I love this stuff. I love it, and it's been a case study. The interesting thing for me is you look at the store base and the different banners under the store base, and I've travelled all over the country. I've seen many, many different store formats through a variety of the banners, many different footprints. You would think that it would be, but the aesthetic of the store, even the cleanliness of the store, often is not the telltale sign of the productivity of the store. As a marketer in my heart, that hurts for me to say that, to be honest with you. How that customer walks away from the experience is so much more dependent on did you make it simple and easy for me? Do I trust in the products that I bought? Did I like shopping with you? Were you kind and courteous and polite with me? That overrides the lighting, the cleanliness, it overrides that. Now don't get me wrong, that stuff is important, but it's amazing to me when I walk into a store that I think at the start, as a customer, my goodness, I would never shop here, and it's one of our highest-performing stores.

Then I go into the analytics or I go into the background and see like, well, why is that? It's typically those three things or those four things. They have a great staff that treats the customer with respect and courtesy and politeness. They have an easy and simple value prop, and they've made the assortment very manageable for the customer. Anyway, that's my rhetoric on that. Kroger could address those things. One more thing I'll say, it's part of your questions here. When I was with Kroger, I saw them make multiple multi-million-dollar investments, Ocado included in things, I could have told you is a bad investment. Don't do that. People inside the organisation see that. They see those millions of dollars going to these initiatives that are just bad decisions or were managed inappropriately that led them to be bad decisions. I could talk for all day about the Ocado investment. I was deeply involved in all of that at the onset. What happened with that is just a case study of ridiculousness in and of itself, but we can talk more about that later. Anyway, that sums up my whole perspective on your question.

[00:24:56] Could you expand on your thoughts around Kroger's recent e-commerce pivot, stepping away from Ocado and leaning more into store-based fulfilment? What are the merits, potential risks or drawbacks?

GB [00:25:57]: I'll give you a little bit of background. Ocado was successful in Europe because the model depends heavily on a concentrated population of people. When you look at Kroger's footprint, they don't have a lot of that. For an Ocado model to be successful for a business like Kroger's, it should have been rolled out in a very strategic way in areas and geographies where it had the best chance of success, high densely populated areas because the last minute mile or the last-mile part of the Ocado equation is where all the expense is. When you've got drivers travelling 20-30 miles to make a delivery, that is just a financial disaster. That's exactly what happened. All of this investment in the automation and all of this investment in the robotics and all of that stuff, it just was not strategically implemented. It had an opportunity to succeed in a limited way in major metropolitan areas, but they didn't do that. The crazy thing, because I was part of that from the start is like, again, I'm not the smartest guy in the room. I was like, well, wait, Ocado was literally telling us that for this to succeed, you need to operate in this capacity, and we're choosing not to do that, like what in the world, but they didn't.

Hence, that last-mile operation added such a layer of expense that it was just not sustainable. The cost of building those warehouses was just astronomical. The volume needed to keep that profitable was never going to be there in the geographically dispersed way that they decided to implement it. That's why you saw them starting to condense the geographies. It started in South Florida and here and there. Then it was like, okay, well, we're not going to open this one, we're not going to open this one. We're going to focus on… All of that was because finally, after a couple of years, finally, they started to see that those broader geographies were just not going to pay out. Ocado was just one of several investments that were delivery-oriented that COVID spurred that were kind of miserable failures. Ocado had a chance, but not the way Kroger went about it. Their pivot away from that is one of the smartest moves that they've made. However, boy, it's going to take… That was a real financial burden, and it's going to take a lot to just dig out from under that. On the flip side, with what you mentioned about the last-mile stuff, one of the best insights that we got from consumers about that model was the owned delivery.

People love that it was a Kroger associate and a Kroger uniform and a Kroger truck delivering their groceries as opposed to an Instacart or an Uber or a DoorDash or whatever, a Shipt, like they love that. Because those were our associates and we trained them accordingly, their customer service was spectacular, and we got tons of great feedback on that element. Again, those trucks cost money. They're driving outside of a five-mile to a 10- to a 15- to a 20-mile radius, not financially profitable, but the experience itself was great. Kroger spinning from that to lean more on the third-party deliveries. Look, those are great organisations that have built really great business models, and that is their business. It was not Kroger's. They've got all of the technology and all of the intel to really optimise that. I think ultimately, that is a smart move for Kroger because they're not in the delivery business. They're in the grocery business. These other companies, their model is built around the delivery business. They have more expertise, more depth of resources, better tools, better whatever. Though it costs a bit for Kroger to play in that world to rely on those third parties, it's still, in the long run, going to be the better option for them than internalising that.

Again, it's a very smart move for them to start to abandon ship on Ocado, but getting out of that ditch is going to be cumbersome because they invested multi-millions of dollars in it. The offshoot of that, is that Kroger went through a huge hiring phase and built all this excitement around that initiative. Now when it fails, that has an impact on the organisation. It has an impact on people's like just kind of like, do I believe in this company anymore. On one side, it's good that the executive changes were made because it puts the people that made those decisions in the rearview mirror. On the other side, for those that have made it through all of this… You're cautious about re-energising yourself and your belief in the leadership in the business because mistakes like that took away from your pay cheque. They took away from your ability to hire more resources. They took away from your ability to serve the customer. It has more ramifications than maybe you see on paper.

[00:32:25] How do you see Kroger positioned to compete within grocery e-commerce and delivery going forwards, especially against players such as Walmart, Amazon, or other conventional grocery retailers such as Albertsons?

GB [00:33:13]: Yes. Kroger operationally on the e-commerce side is excellent. They're excellent. Operationally, I don't know as much about Amazon, Walmart and their internal workings, Target, Albertsons, as much as I do about Kroger's, but Kroger is operationally excellent when it comes to e-commerce. Now that said, they have the same challenges when it comes to the shopping experience online and the same challenges, meaning it's too complex. The user experience, the UI, the user interface is too complex because they're beholden to their rev share to their retail media model. They're pounding the customer with advertising that the customer doesn't necessarily want because they need the revenue off of that. Their promotional model is overcomplicated to the point where customers go, "Wait, what do I have to do to get what?" There's too much noise in terms of irrelevant content. I worked very closely in this part of the business. I fought as hard as I could for Kroger to create a user experience where if I just want to shop grocery, just let me do that in a very simple direct manner. If I want information, if I want recipes and entertainment and other things, let that be a separate path that I get to choose because it's my time. If I want just to do my grocery shopping, eliminate all of that noise and make that clean and simple for me.

Instead, at least during my tenure, it was all integrated and it just created an overwhelming, very noisy user interface. Now once customers got used to it, they were excellent operationally at the back-end fulfilment of the process. They were excellent at it and consistently and continuously optimising to make it more and more and more efficient. They were really, really good at it, really good at it. They could measure down to the second and then optimise according to those analytics and did so and very, very effectively. Unless they invest in a cleaner user experience for the grocery shopping part of things, they're still going to falter in comparison to others that have focused on that. The other thing that I'll say is the delivery mechanism, what was growing the most for us when I was there just a few months ago is the shop online, pick up in store. That was the biggest growth engine for e-commerce. The delivery piece of it, whether Instacart, DoorDash, Uber, whatever, that was modestly growing, but the shop online, pick up in store was growing exponentially.

That's again because Kroger had full control over every aspect of that. Every aspect of it, that was theirs. It wasn't third-partied out to anyone. Most customers appreciated that model the most because it still gave them the ability to see the goods before they actually walked off with them. It's always the threat… Nobody complains about a box of Cheerios, a box of Kraft macaroni and cheese. Nobody complains about that. What they complain about in the delivery is the meat, seafood, poultry, fish, whatever produce, food, fruits, vegetables, that's where the complaints come in when I'm not picking it out myself. The third parties, one, they need to get better at that, but more importantly, the shelves need to be stocked, the items need to be there for them to choose from to make that process better for the customer because that's where all the grievances come in. Very rarely do you hear, "My box of whatever was smashed." It happens, but it's like, they care about the quality of their meat, seafood and produce. That's where the distinction comes in.

Kroger has an opportunity to really own that and position themselves as the best at that because operationally, they're so excellent. If they focus on getting better quality produce and meat, fish, seafood into the stores in general and then align closer with their partners to make sure that those customers are getting the best of or that the pickers are actually picking particularly what the customer wants, some people like a ripe tomato. Some people want an unripe tomato. Kroger has the ecosystem, the data, the technology to do all of that better than anybody else. That would be a great opportunity for them to jump, leapfrog some of the competitors because Kroger is still a grocery store specifically. They're not a general merchandiser like Target or Walmart, who has all this as well. They're a grocer first. If they focus on that, they can own that space or at least be known as the best at, the best-in-class in that space.

[00:39:43] How do you evaluate Kroger's overall approach to merchandising strategy and assortment mix, especially around growing segments such as better-for-you, clean labels, functional products, etc? Is the company moving fast and effectively enough in these aspects from an assortment perspective? Where does it fall short of its competitors?

GB [00:40:33]: Boy, oh, boy, you hit on a real hot point for me. The unfortunate is for the right change to happen to benefit the consumer, so the heck with Kroger or the heck with that, but for the consumer benefit, for the consumer to get what the best out of all of this, these mass market grocers, they need to align collectively because they're not making the product. Yes, they have private label. For the most part, you look at Kroger Simple Truth Organic, it is an excellent product. They control the vertical, they control the supply chain. They make an excellent product, so does Albertsons with their O Organics, so does Trader Joe's. When they're in control of it, they make a great product. Even though it's a growing part of their revenue, the private label is a growing part and a super important part of their revenue. It's not the majority. Now you've got the PepsiCos, the Mondelēz, the Unilever, it's on them. It's on them to make the product better. The Krogers and the Albertsons, they had the clout because of the store count, because of the dollar volume, they have the clout to force change there, but they don't. They don't because it's hard and the CPGs don't want to do it.

I've been in the natural organic space for almost 20 years. What I've seen when I started in the space, not to go off on a tangent, but it's relevant to the question. When I started in the space, most, if not all, of these brands were founder-owned, founder-led on a very mission, vision-based business to improve the quality of nutrition that they were putting into the market. Then what happens? Those founders get greedy, happens in a capitalistic economy, and they all sell out to the CPGs, to the Clorox, to the Procter & Gamble, to the Coca-Cola, to the PepsiCo, to the Mondelez, to the Unilever. The list goes on and on and on. They all sell out, to the Nestlé. Then what happens? Most of those CPGs destroy them. Instead of letting them do what they do best, they try to force fit them into their more commoditised mass market model to be more efficient and save money and make more money and whatever. They ruined what made them successful in the first place. The non-educated consumer maybe doesn't see that but behind the scenes, it's happening. It's happening and it's happened so many times now, like this most recent one, Thorne for God's sakes.

Thorne was a manufacturer of the highest quality supplements you could buy, and they sold out. They had no reason to sell out other than greed. No reason. Their business was on fire. I know for a fact. They sold out as did so many… As did Siete and as did Aloha and as did all of these innovative food manufacturers who are trying to make better-for-you stuff to the point now where when I see a new company emerge with a new brand in the food space, I'm like, "Well, if they're successful, they're just going to get bought out. They're going to get bought out by a large CPG who probably, 70% likelihood, is going to destroy their business model and absorb them into their commoditised system and raise prices and reduce the quality of the product and short change the customer." I've seen that happen so often, it's ridiculous and it continues too. The Krogers and the Albertsons, they had an opportunity about one decade ago to force those CPGs into providing better-for-you products for the customer. Both the mass market grocers and the large CPGs said, "That's not going to be the most profitable for us, so we're not going to do it." That's what I saw, and I continue to see it.

[00:45:20] We discussed where Kroger might fall short in pricing compared to competitors such Walmart and value retailers. How sticky do you see the consumers who have traded out of Kroger being to other channels?

GB [00:46:27]: Yes, again, you're unfortunately going to get a little philosophy from me because it's so… What's the right word? To me, the way to get the most out of the business, the way to manage a business is to be absolutely customer-centric. Not preach it, not just say it, it's to really genuinely be customer-centric. If you are, more than likely, the fruits of that labour will pay off for you. The customer will become loyal to you. The customer will choose you. The customer will stay with you, will be loyal to you if they truly believe that you are looking out for their best interest. The challenge is in our society and our economy, the businesses don't. Especially publicly traded companies, they don't. They're beholden to the shareholders. They're beholden to the board of directors. They're not beholden to the customers. They say they are, they preach that they are, but they're not. Hence, all these types of things happen. I've studied this space beyond my career. I could go into a dissertation about how manipulative the whole food industry has been, how they've addicted us to sugar and salt purposefully, but that's a whole another tangent.

Here we are today and what are we going to do about it? It seems like the combination of the divide in our class system is going to have a specific impact on this because everyone wants better-for-you nutrition. Everyone wants that. Around the world, especially in Europe, they joke about our food system. They joke about it because it's so awful. What we eat is just garbage. I could go on and on about that, about processed foods and how most of them aren't even allowed in European countries and they're mainstays on the shelves of all of our commodity grocers, but I won't go off on that tangent. You're seeing this wealth gap continue to increase. What's happening is the upper class, the financially well off, as they concentrate more… Let's say, you call them the one percenters, let's say that that's now the five percenters, they still dominate the wealth spectrum. They're always going to look for the better-for-you quality products and be able to afford them. The rest are going to be struggling. They want the better-for-you stuff, but they've been priced out of the market. They're forced into the sugary, salty, mass-produced crap that we fill our shelves with. They're forced into it because it's all they can afford.

The reality is that making that better-for-you stuff is no more expensive than making the processed crap. It's no more expensive to do it, but the industry has chosen that. The industry has. The consumer wants the healthier products and they will pay for them at the… They're willing to pay for them at a value. It is a lie for these companies to project that, "Oh, well, we have to charge you more for this organic produce because it costs so much more to grow, to manufacture." No, it doesn't. I know for a fact that it doesn't. They put that perception on the customer to drive the cost of these products up. The elite, the financially well off will continue to be able to shop them in that direction. The rest of the consumer public, domestically here specifically, are going to continue to struggle to find healthy nutritious items that they can afford. Now where does Kroger want to play in that spectrum? Where do they want to play? Historically, it's been everywhere. We want all of it. We want the lower class, we want the middle class, we want the upper class, financially. We want all of them. That is not going to be possible. It's not going to be possible. I believe, and I say this with conviction, what do I know. I just know what I've taught myself and what I've researched and what I've experienced.

They would be better served… That's why the Aldis are having such great success. They're clearly positioned as a value prop, clearly. You're not going to find luxury goods there. You're not going to find high-end cheeses, you're not going to find high-end wine. They're purposely positioned as a value prop. Same with Trader Joe's, same with Sprouts. Sprouts is purposely positioned as a better-for-you choice. Whole Foods, purposely positioned as a better-for-you choice. You're going to pay a little bit more, but you're going to get a better quality. Kroger is trying to be everything to everybody, and it's just not the way things are leaning. Same with any mass market commoditised grocer. That's what I referenced earlier in terms of their inability to really secure their position. I was intimately a part of the whole platform, the whole Fresh for Everyone platform, the development of that. I was intimately involved with that and so excited, so excited that that's the direction that we were going.

It was great in concept, and if executed… Fresh should have been looked at as almost entertainment within the store. I walk in and I see the meat and the seafood, I see the bakery goods or whatever. I see the fruits and the vegetables and it would be like, "Oh, my God, this is spectacular." Instead, very little change, same display, same exposure in the store, same quality of goods and yet this promoting of, "We're the place to go for fresh." You got to back it up with the proof or else the customer just treats it as another false proposition. That's a lot of what's happened with Kroger specifically. Great in theory, great in concept, just very, very poor in the execution. I'm not saying it's easy to execute that, by the way. That should have been thought about when they agreed and aligned to that positioning platform. If there wasn't the willingness to invest in what it took to really make that happen, then they shouldn't have gone in that direction. That's where they sit today. Now will they continue on with that? Will they pivot? Will they invest in it to make it meaningful? I don't know. To date, through my experiences, they have not.

JO [00:54:42]: I'm sorry, go ahead.

GB [00:54:45]: I was going to say. I believe you're going to continue to see success in those grocers that have purposefully positioned themselves. They're the ones that are going to continue to erode market share from the mass market grocers.

[00:55:05] What are your thoughts on Kroger's acquisition of Giant Eagle on 1 July 2026? How do you assess the strategic rationale behind the acquisition? To what extent could this acquisition be seen as a defensive move to protect Kroger from further share erosion from competitors such as Walmart vs a move that unlocks true, additional growth opportunities?

GB [00:55:56]: I was shocked by the announcement because to me, it made absolutely no sense for them to acquire a Giant Eagle. The only thing I can think is Kroger is lacklustre in that Northeastern geography. Giant Eagle is very dominant in the Pennsylvania and surrounding area. They get some regional growth out of that. I do think based on what I know about Giant Eagle, I did live in Pittsburgh for about six or seven years so I'm very familiar with the Giant Eagle stores. I do think Kroger can bring some sophistication and operational excellence to Giant Eagle. I definitely feel that. At the same time, I hope that they don't do too much to change because the brand recognition and the equity that Giant Eagle has built in that geography over time is very, very meaningful. They have to be very careful to not erode the trust and equity proposition within the communities while leveraging their abilities to create some operational excellence. Overall, I did not see that as a very smart decision, a defensive decision for sure, in my opinion, not a growth trajectory type of decision. They are a pure-play grocer. They do have regional clout and Kroger is weak in that geography. I guess from that perspective, maybe it made sense. Outside of that, I don't see it being leveraged all that much.

[00:57:47] What is your outlook for Kroger over the near-to-mid-term? What are the company's key priorities, risks or challenges moving forward?

GB [00:58:12]: Yes. It will reflect back on a lot of the comments I've already made. It's going to be very interesting to see what Foran brings to the table here and what he and the board of directors decide to focus on, if they do some of the things that we've talked about. It's a 100-plus year-old company with nearly 4,000 locations and a very, very strong technology base and customer analytics base. They're not going anywhere per se, but will they grow, and will they grow organically or will they grow through acquisition is the real case in point. Being publicly traded, same-store sales is super important. Their ability to do that really depends on where Foran chooses to invest. If he chooses to invest in the organisation itself to bring that energy level and trust and respect in the organisation from the associates up, if he chooses to invest in that, they have a great opportunity to grow and steal share. If they stick to this platform, but actually invest in it, this Fresh for Everyone platform, but actually invest in it so that it is what it was intended to be, they also have a really great chance to steal market share and grow. Combine that with their e-commerce ability to operationalise the back end of that, if they simplify their promotional model, if they simplify their user interface on the e-commerce side, if they do all of that, they have unlimited potential to gain share back.

They'll take it more from their other commoditised mass market competitors first. It's going to be very hard for them to steal it from the Amazons and the Walmarts but they'll take it from Target. They'll take it from Albertsons Safeway. They'll take it from Publix. They'll take it from Wegmans, but it's going to be harder for them to take it from the Amazons and the Walmarts. There's share to be had. They have the ability and the opportunity to do it. One last thing, I know we're running over. I've got an extra minute if you do. The other thing that I fell on my sword promoting to Kroger is they have this potential ecosystem for wellness that their competitors don't really have. When you think about the wellness journey, which is really nutrition-based, but also includes financial wellness, spiritual wellness, professional wellness, Kroger has an ecosystem to provide for all of that, using nutrition and grocery as the core. Then they have the pharmacies, they have the financials, they have all of that. If they were able to pull that together and present a position of health and wellness in multi-dimensions for the customer, they could own that proposition. They could literally own that. They'd have to back it up, and the proof points would all have to be there. They'd have to earn the customers' trust in that, but they have the tools and they have the resources to do it.

I truly believe that's what the customer wants. They want a simplified version of, where do I go that I can trust that the business is providing me with the service, the price and the offerings that are going to really promote my individual health and wellness journey, no matter what that is, whether I'm chronically ill or whether I'm a supreme athlete and everything in between? Who's doing that for me in a way that I can trust I'm getting the best value, the best advice, the best service, the best assortment? Kroger has the opportunity to seize the day on that. It will be interesting to see. I presented it multiple times to the previous executive team, knowing that it was a big idea, a very big idea. I truly feel that whoever seizes that is going to be the big winner in this category. People are desperate for someone to trust in that can provide them a holistic approach to their wellness journey. People are desperate for it.

JO [01:02:57]: I think that's a great place for us to end. Thank you very much for your time and all the great insights.

GB [01:03:11]: Thanks. Nice to speak to you as well.

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