We’re in the midst of very strange economic times.
On the one hand, unemployment is low, and the economy is supposedly in good shape. Inflation is also cooling.
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So then why are so many people facing higher costs than ever and struggling to keep up with their bills?
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Part of the problem stems from the fact that while inflation isn’t horrendously elevated these days, it’s been sitting at higher-than-average levels for years. And as a result, a lot of people have been paying more for essentials since 2021.
Unfortunately, tariff policies could make matters even worse as the year progresses.
Right now, there’s a pause on tariffs. But once it ends, we could see the price of all sorts of products increase. And one key category that’s likely to rise is food.
A major supermarket chain is closing 60 locations.
Image source: Getty Images
Consumers need affordable groceries now more than ever
This stretch of pesky inflation has changed the way a lot of people spend their money.
These days, many can’t afford to shell out extra for restaurant meals, so they’re turning to their neighborhood supermarkets for groceries instead.
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This trend is clearly bad news for the restaurant industry. But it’s good news for grocery chains.
Even if food costs increase once tariffs take hold, consumers will have no choice but to stock their pantries and fridges. And as it gets even costlier to dine at restaurants, the demand for groceries could increase.
Given these trends, you’d think grocery stores these days would be making plans to open their doors, not close them. And to be fair, some of them are. Aldi, for example, is working on an expansion strategy that will add 225 stores to its lineup by the end of 2025.
But one major supermarket chain is doing the opposite.
Kroger is closing dozens of locations
Kroger, one of the largest supermarket chains in the country, is making plans to close 60 stores in the next 18 months.
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The Cincinnati-based grocer says it’s specifically looking to shutter locations that have been underperforming.
The move should free up money on Kroger’s balance sheet to move forward with other plans, such as remodeling existing stores in need of a refresh. The company said earlier this year that it’s looking to invest in an improved customer experience.
Kroger is also looking to expand its selection of private-label products. At a time when consumers are looking to conserve funds as much as possible, offering up store brand products at competitive prices makes sense for Kroger. So does shuttering less profitable locations, to a degree.
But if demand for groceries picks up, Kroger could end up regretting the decision to close some of those stores, especially if it means losing customers to competitors.
At the end of its most recent fiscal year, Kroger operated over 2,700 stores across 35 states. The 60 planned closures represent just a small portion of the company’s overall footprint.
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The company did not state specifically which stores are targeted for its upcoming round of closures, so customers will have to keep an ear out for more information.