As of 30 October 2026, Kroger's 18 billion dollar e-commerce business can grow to 30 percent of the company's business in the long term, according to Nate Faust, executive vice president and chief e-commerce officer, speaking at the company's 2026 investor update. The plan he outlined is to be fresh, fast and personal for digital shoppers. The most striking part of the presentation was not the target but the baseline: only one in seven Kroger store customers currently shops online with the company.
One in seven is the real headline
Faust was direct about where near-term growth comes from, saying many of these customers are already shopping for groceries online, just not with Kroger, and that winning a greater share of existing customers' online baskets is the immediate opportunity. That reframes the problem from acquisition to conversion. The shoppers exist, the stores exist, and the relationship already exists through loyalty data; what is missing is the habit of ordering online from this particular retailer.
The friction is measurable and unusually concrete. Only about 40 percent of customers who begin signing up to shop Kroger online complete the process, and Faust said he recently timed a sign-up at one banner at close to four minutes. Four minutes is not a technology problem in the abstract; it is a specific sequence of form fields, verification steps and password rules that loses six out of ten people who had already decided to try.
Organising around the sign-up, not the org chart
Kroger is organising small cross-functional teams around each step of the customer journey, using customer feedback and performance measures to remove friction, and Faust said he stays close to pain points by regularly listening to live customer service calls alongside agents. This is a familiar pattern in digital retail turnarounds: the constraint is rarely the checkout page, it is the handoffs between teams that own adjacent steps.
The speed numbers show where the operational investment is going. In the second quarter, 60 percent of Kroger's store-based delivery orders arrived in under two hours, including 23 percent in under one hour, and express delivery grew more than 50 percent during the quarter. Faust said customer expectations on delivery speed keep rising every year, every month and every day, and that consumer demand of this kind is now the organising constraint rather than a nice-to-have. The store network, he argued, is the asset that makes speed possible.
Automated picking and the cost of the last mile
Kroger is exploring automated picking in stores to fulfil orders faster at lower cost, expanding pickup slots where demand is constrained, and pursuing capital-efficient express delivery models, with management noting that if more capacity is needed it will add more stores. The sequencing matters: automation inside existing stores raises throughput before a new building is required, which keeps the capital intensity of digital growth lower than a dedicated fulfilment centre strategy.
The assistant that lifts basket size
The company's AI-powered shopping assistant is now available across 100 percent of its banners and can help a family plan dinner based on preferences, dietary needs and budget. Repeat users spend 11 percent more, driven by more frequent trips rather than larger baskets, according to the presentation. That detail is the most useful number in the update for anyone building digital grocery products: habit frequency, not basket inflation, is what the assistant actually changes.
Retail media sits on top of the same data. Kroger Precision Marketing grows as first-party relationships grow, with approximately 95 percent of sales tied to identified loyalty shoppers, which lets the company offer brands verified audiences rather than approximations. Faust drew the contrast explicitly, saying Kroger helps brands identify and reach verified lapsed buyers while other platforms rely on look-alike audiences to approximate those customers.
Why price investment and digital growth are one plan
In a separate announcement, Kroger said it will invest 5 billion dollars in customer value through lower everyday prices and simpler promotions. Price investment and digital growth are usually presented as separate strategies; here they are the same plan. A shopper who trusts the shelf price has less reason to check a competitor app, and a simpler promotion structure reduces the number of exceptions that break online pricing and pickup substitution logic.
| Metric | Reported figure | Read |
|---|---|---|
| E-commerce share today | 18 billion dollar business | Target is 30 percent long term |
| Store customers shopping online | One in seven | Conversion gap is the opportunity |
| Sign-up completion | About 40 percent | Friction sits before the first order |
| Delivery under two hours | 60 percent in Q2 | Store network is the speed asset |
| Assistant repeat users | Spend 11 percent more | Driven by frequency, not basket size |
FAQ
What is Kroger's e-commerce target?
Management says the 18 billion dollar e-commerce business can grow to 30 percent of the company's total business in the long term, without specifying a date.
How many Kroger customers shop online?
Only one in seven store customers currently shops online with Kroger, which management frames as the near-term opportunity because many already buy groceries online elsewhere.
What is blocking sign-ups?
About 40 percent of customers who start signing up complete the process, and one timed sign-up took close to four minutes at a single banner.
How fast is delivery?
In the second quarter, 60 percent of store-based delivery orders arrived in under two hours, including 23 percent in under one hour, and express delivery grew more than 50 percent.
