• Costco and Kroger both turned in strong results, in aggregate, relative to expectations. Obviously, Costco has faster growth given its deep value positioning and affluent customer mix. For the fiscal periods, Costco grew its US grocery business by roughly +$10B (annualized) vs. Kroger’s growth of $1.4B.
  • Incoming Kroger CEO Greg Foran offered an early take on where he wants to take Kroger – move faster, systemize consistency in experience and enhanced product quality / freshness, and more price investment.
  • Kroger ended its fiscal year on a stronger note and guided for market share growth in 2026.

Costco reported consistent results on an underlying basis for February, and strong earnings / membership trends for the fiscal quarter ended February 15th. Kroger reported in-line sales trends for the fiscal quarter ended January 31st and guidance for market share gains in ‘26. Additionally, incoming CEO Greg Foran offered his early perspective on the retailer and where he wants to take it. His bottom line: move faster, systemize consistency in experience and enhanced product quality / freshness, and more price investment (a glide path, not a step-reset). Said differently, there should be no large disruption to the industry’s current competitive status or the food supplier base; his direction is more of an amplification of what interim CEO Ron Sargent had already started. But there is also urgency, which makes sense give that Sargent was an interim CEO. Foran said that he wanted to make Kroger “the best Kroger we can be.” Said differently, he wants Kroger to stick to its own distinct “lane” – which is not so different from we heard from Target earlier in the week.

Now turning to the individual reports and what Advan’s data reveals. For perspective, for the quarter, Costco delivered around +7.5% growth in grocery, or +$9.8B on an annualized basis. Kroger delivered +1.1% comp-sales, excluding pharmacy (per our estimate), which is +$1.4B annualized, or only 15% of what Costco did. On the quarter and year, Kroger’s grocery comp-volume fell, with produce up and center-store down. (See our perspectiv e on the trend – Walmart, Costco, Amazon, and Aldi are winning meaningful share in center-store / pantry-load categories.)

Costco reported traffic of +2.0% / +1.5% for FQ / February. Delivery contributes to those figures, and we don’t know how to separate out the inside-the-store traffic. **Observed traffic **also slowed in February, still increasing +1.8% on a per-store basis. Recall that sales (and presumably traffic) are benefiting by about +100bps from the expanded store hours for Executive Members. **Observed visit frequency and dwell time **both improved in the period. Given that Costco is a treasure-hunt shopping experience, increased dwell time generally aligns with more items in the basket (UPT) and a higher average ticket. Average ticket increased +3.5% for the quarter, driven by more UPT, some tariff pass-through, and the higher price of gold, which is up over 100% YoY. Management called out tires, appliances, health and beauty, and small electronics as outperforming categories. Regionally, management called out the Midwest, Northwest, and Southeast as having the strongest comp-sales increases. To suggest a magnitude, Florida’s observed visits were up +6% for the quarter. For the important Los Angeles market, observed traffic / visitors increased +2-3%. Turning to worldwide membership trends, the renewal rates were largely stable. Executive Membership growth was +700K QoQ and +8.8% YoY. Annualized sales per member (total members) increased to $3,211 (+1.8% YoY). Management downplayed seeing any competitive encroachment from Sam’s Club on sales or membership. (See our review of Sam’s results .)   Turning to Kroger, the non-RX comp-sales increase of +1.1% was ~50bps stronger QoQ (per our estimate) with average ticket softer QoQ due to falling egg prices and strategic price reductions in beef (amongst other categories as well), more than offset by stronger **observed traffic **and an improved unit trend. Based on management’s comments, we suspect that UPT also contributed to the stronger trend (with prices / AUR actually down YoY). Inflation moderated a meaningful -90bps QoQ. We also suspect that the +200bps QoQ improvement in **observed traffic **was somewhat an artifact of the increased activity by the ramping 3P delivery service partners (DoorDash and Uber Eats). (Previously, we saw that as well in Sprouts’ results after it launched partnerships with the services.) Moreover, e-commerce / delivery is a big growth driver at 2X the overall $-comp growth ($670M vs. $350M), and so, even if the delivery partner is picking up multiple orders during its visits, the sum of all that 3P activity can move the aggregate observed traffic number. Lastly, looking forward, Kroger guided to an underlying comp-sales increase of +2.3% - 3.3% for the year, which should be slightly above food-at-home’s growth. (December food-at-home consumer expenditure, on a nominal PCE basis, increased +2.0%.) 

See our last write-up on industry trends here  and here , and the last results  from Costco and Kroger.