Kroger targets 30% e-commerce revenue long-term

Kroger aims to make e-commerce account for 30% of its business long-term, up from the current $18 billion segment, according to Nate Faust, the company’s chief e-commerce officer. Faust, who joined Kroger about six weeks ago, outlined the strategy at the company’s 2026 Investor Update, emphasizing a focus on being “fresh, fast and personal” for digital customers.

Targeting Existing Shoppers

The near-term opportunity centers on existing Kroger shoppers, as only one in seven store customers currently shops online with the company. Faust noted that many of these customers are already purchasing groceries online—just not through Kroger. He described winning a larger share of existing customers’ online orders as a more efficient growth strategy than acquiring new shoppers.

Sign-up friction remains a hurdle, with about 40% of interested customers abandoning the process. Faust recently timed registration at one banner at nearly four minutes. To address this, Kroger is deploying small, cross-functional teams to streamline each step of the customer journey, using feedback and performance metrics. Faust personally stays attuned to issues by listening to live customer service calls.

Speed and Store Network Advantage

Delivery speed is a key priority. In the second quarter, 60% of store-based delivery orders arrived within two hours, including 23% in under one hour. Express delivery grew more than 50% during the period. Faust emphasized that Kroger’s 2,700 stores provide a critical asset for fast fulfillment, noting rising customer expectations for speed.

To fulfill orders faster and at lower cost, Kroger is testing automated picking in stores and expanding pickup slots where demand is constrained. The company is also pursuing capital-efficient express delivery models, with plans to add more stores if additional capacity is needed.

Loyalty Data and AI Tools

Kroger’s AI-powered shopping assistant is now active across all banners, helping families plan meals based on preferences, dietary needs, and budget. Repeat users spend 11% more, driven by more frequent trips. Faust said the company aims to understand not just what customers buy and when, but why, whether that’s feeding a family or pursuing a healthier lifestyle.

Kroger Precision Marketing is expanding, with approximately 95% of sales tied to identified loyalty shoppers. This allows Kroger to offer brands verified audiences rather than approximations. Advertisers rank Kroger first for accurate and transparent reporting and second for audience targeting and data sharing. Retail media priorities include growing first-party e-commerce, expanding brand reach with a larger sales team, and leveraging connected stores for in-store media. Faust said the company is working toward a future that’s “fresh, fast and personal,” wherever and however customers choose to shop.