Why Shares of Kroger Are Surging Today

Kroger To Close 60 Stores Across US: What To Know

Newsweek

30 minutes ago

Newsweek

Kroger To Close 60 Stores Across US: What To Know

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Kroger announced plans to close 60 of its supermarkets across the United States over the next 18 months, representing about 5 percent of the Cincinnati-based company's 1,239 Kroger-branded grocery stores across 16 states. The popular grocery retailer revealed the closure plans while reporting first-quarter earnings on Friday but has not specified which store locations will be affected or released a list of impacted stores. Newsweek reached out to Kroger on Saturday via email for comment. Why It Matters Companies close store locations for various reasons. While shifts in consumer shopping behavior and lower demand can cause stores to close, corporations often choose to shutter underperforming locations. Sales dropped slightly to $45.1 billion compared to $45.3 billion for the same period a year earlier according to Kroger earnings data. The move comes as grocery retailers nationwide face mounting pressures from changing consumer habits, inflation, and increased competition from discount chains and online retailers. More than 2,500 store closures are planned across the U.S. this year, according to The Mirror. What To Know Kroger expects the 60 store closures to provide a modest financial benefit to the company, according to a regulatory filing. In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closings. The company indicated that resulting savings will be reinvested into customer experience initiatives across remaining locations. The closures affect Kroger's extensive footprint spanning 16 states, though the company has remained tight-lipped about specific locations. The grocery retailer told CBS MoneyWatch that it will not be releasing a list of the affected stores. This lack of transparency has left employees and customers uncertain about which communities will lose their local Kroger. However, Kroger says it is committed to supporting displaced workers. All employees at affected stores will be offered roles at other Kroger store locations, though details about relocation assistance or wage protection remain unclear. The timing coincides with broader challenges facing traditional grocery retailers. Many chains are grappling with rising operational costs, changing shopping patterns accelerated by the pandemic, and fierce competition from warehouse clubs, dollar stores, and e-commerce platforms. FILE - This June 17, 2014, file photo, shows a Kroger store in Houston. Kroger Co. FILE - This June 17, 2014, file photo, shows a Kroger store in Houston. Kroger Co. AP Photo/David J. Phillip What People Are Saying Kroger company statement: "As a result of these store closures, Kroger expects a modest financial benefit. Kroger is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance." Director of Media Relations/Corporate Communications Erin Rolfes told Newsweek in an email response: "In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closing of approximately 60 stores over the next 18 months." Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, previously told Newsweek: "For some major retailers, 2025 is becoming a year of consolidation. Retail locations that have struggled in recent years to remain profitable due to rising costs and less demand are being shuttered, as companies focus their efforts on more successful stores. The hope is these closures will ultimately produce more fiscal and operational efficiency, but it will come at the cost of customers who favored these locations having fewer options." Michael Ryan, a finance expert and the founder of previously told Newsweek: "These aren't random casualties; they're strategic amputations of unprofitable limbs to save the corporate $15+ minimum wages to supply chain inflation, all crushing their razor-thin margins. Combine this with the march of e-commerce and changing consumer habits post-pandemic, physical retail becomes a luxury many companies can no longer afford." What Happens Next The 18-month closure timeline suggests Kroger will implement the plan gradually, though specific dates and locations remain undisclosed.

Why a top market strategist says his base case is still a 25% stock drop and a recession in 2025

Yahoo

an hour ago

Yahoo

Why a top market strategist says his base case is still a 25% stock drop and a recession in 2025

Peter Berezin of BCA Research maintains a bearish outlook despite a tariff pause. Berezin predicts a 60% chance of recession, with the S&P 500 dropping to 4,500. Economic concerns include trade uncertainty, rising delinquencies, and a weakening labor market. At a time when strategists across Wall Street are dialing back their recession probabilities, Peter Berezin of BCA Research is doubling down. President Donald Trump's 90-day tariff pause was enough to ease the worries of some investors, but the chief global strategist at BCA has maintained his bearish outlook. While Berezin has lowered his recession outlook from Liberation Day levels, he still expects an economic slowdown to unfold this year. "I've brought down my recession probability from 75% to 60%, so it's not an overwhelming likelihood of recession, but it is still my base case. And in that base case, I would expect the S&P to trade down to around 4,500," Berezin told Business Insider. That would mark a 25% decline for the benchmark index from levels on Friday. While 4,500 sounds like a steep drop from the near-record highs the stock market is trading out now, Berezin doesn't think it'll take much to trigger the fall. A plunge to that level would require the S&P 500 to trade at 18 times earnings with EPS of $250. The index is currently trading at around 23 times earnings with EPS of around $260 — not too far off, in Berezin's opinion. "At this point, it's hard to make a case to be very optimistic on either the stock market or economy," Berezin said. The economy was already showing signs of weakness prior to the trade war fallout, Berezin said. Back in December of 2024, Berezin was calling for a recession in 2025 coupled with a stock market plunge of over 20%. His S&P 500 target of 4,452 was one of the lowest on Wall Street. Today, Berezin is concerned about continued trade uncertainty, a growing deficit, and a weakening consumer. Job openings have been on a downward trend since early 2022, "removing a lot of insulation that had protected the labor market," Berezin said. Indeed, other economists agree that the labor market might be weaker than it seems — Sam Tombs of Pantheon Macroeconomics is concerned with slowing hiring and declining small business sentiment. Berezin also points out that consumer delinquency rates on credit cards and auto loans have been rising. In the first quarter of 2025, credit card delinquencies hit 3.05%. That's the highest level since 2011, "a year in which the unemployment rate was 8%," Berezin said. Furthermore, as student loan collections restart after a five-year hiatus amid the pandemic, consumers' credit scores are taking an even bigger hit. The housing market has also been a pressure point in the economy since COVID, with home affordability and inventory challenges mounting for buyers. Berezin pointed to falling construction in May—housing starts dropped 9.8% in the month— as another sign of a slowdown. The effective tariff rate is hovering around 15%, which is still a level that Berezin considers dangerous. "There's probably no ideal for a tariff rate, but there are numbers that are more punitive for the economy than others," he said. If Trump doesn't solidify trade deals soon, the economy could be in store for some major pain as businesses start to pass along price increases to consumers. A tariff rate lower than 10% would be less disruptive to the economy, but Berezin isn't hopeful that Trump will lower his policies to that level. "Since tariffs on China probably will be higher than tariffs in other countries, that means Trump would have to roll back his 10% base tariff that he's applied to almost all countries," Berezin said. "I don't see him doing that unless the market forces him to do it." In fact, Berezin thinks Trump might even increase tariffs on some industries such as pharmaceuticals, semiconductors, and lumber. Berezin doesn't see an easy way around an impending recession. Some strategists might be hoping for Trump's Big Beautiful Bill to boost the economy through tax cuts, but unfunded tax cuts could push bond yields higher and cancel out any any stimulus. According to the Congressional Budget Office, while the tax bill would increase GDP growth by 0.5% on average over the next 10 years, it would also push up 10-year Treasury yields by 14 basis points and increase the deficit by $2.8 trillion. A stock market crash and economic downturn could actually be the turning point for Trump to reverse course on his policies, Berezin said. The S&P 500 dipping below 5,000 and the 10-year Treasury yield spiking above 4.5% probably influenced Trump to paus tariffs for 90 days, Berezin added. "We could get more tariff relief, but the market has to force that. I don't think it's going to come from any other source," he said. Read the original article on Business Insider

Yahoo

2 hours ago

Yahoo

Why a top market strategist says his base case is still a 25% stock drop and a recession in 2025

Peter Berezin of BCA Research maintains a bearish outlook despite a tariff pause. Berezin predicts a 60% chance of recession, with the S&P 500 dropping to 4,500. Economic concerns include trade uncertainty, rising delinquencies, and a weakening labor market. At a time when strategists across Wall Street are dialing back their recession probabilities, Peter Berezin of BCA Research is doubling down. President Donald Trump's 90-day tariff pause was enough to ease the worries of some investors, but the chief global strategist at BCA has maintained his bearish outlook. While Berezin has lowered his recession outlook from Liberation Day levels, he still expects an economic slowdown to unfold this year. "I've brought down my recession probability from 75% to 60%, so it's not an overwhelming likelihood of recession, but it is still my base case. And in that base case, I would expect the S&P to trade down to around 4,500," Berezin told Business Insider. That would mark a 25% decline for the benchmark index from levels on Friday. While 4,500 sounds like a steep drop from the near-record highs the stock market is trading out now, Berezin doesn't think it'll take much to trigger the fall. A plunge to that level would require the S&P 500 to trade at 18 times earnings with EPS of $250. The index is currently trading at around 23 times earnings with EPS of around $260 — not too far off, in Berezin's opinion. "At this point, it's hard to make a case to be very optimistic on either the stock market or economy," Berezin said. The economy was already showing signs of weakness prior to the trade war fallout, Berezin said. Back in December of 2024, Berezin was calling for a recession in 2025 coupled with a stock market plunge of over 20%. His S&P 500 target of 4,452 was one of the lowest on Wall Street. Today, Berezin is concerned about continued trade uncertainty, a growing deficit, and a weakening consumer. Job openings have been on a downward trend since early 2022, "removing a lot of insulation that had protected the labor market," Berezin said. Indeed, other economists agree that the labor market might be weaker than it seems — Sam Tombs of Pantheon Macroeconomics is concerned with slowing hiring and declining small business sentiment. Berezin also points out that consumer delinquency rates on credit cards and auto loans have been rising. In the first quarter of 2025, credit card delinquencies hit 3.05%. That's the highest level since 2011, "a year in which the unemployment rate was 8%," Berezin said. Furthermore, as student loan collections restart after a five-year hiatus amid the pandemic, consumers' credit scores are taking an even bigger hit. The housing market has also been a pressure point in the economy since COVID, with home affordability and inventory challenges mounting for buyers. Berezin pointed to falling construction in May—housing starts dropped 9.8% in the month— as another sign of a slowdown. The effective tariff rate is hovering around 15%, which is still a level that Berezin considers dangerous. "There's probably no ideal for a tariff rate, but there are numbers that are more punitive for the economy than others," he said. If Trump doesn't solidify trade deals soon, the economy could be in store for some major pain as businesses start to pass along price increases to consumers. A tariff rate lower than 10% would be less disruptive to the economy, but Berezin isn't hopeful that Trump will lower his policies to that level. "Since tariffs on China probably will be higher than tariffs in other countries, that means Trump would have to roll back his 10% base tariff that he's applied to almost all countries," Berezin said. "I don't see him doing that unless the market forces him to do it." In fact, Berezin thinks Trump might even increase tariffs on some industries such as pharmaceuticals, semiconductors, and lumber. Berezin doesn't see an easy way around an impending recession. Some strategists might be hoping for Trump's Big Beautiful Bill to boost the economy through tax cuts, but unfunded tax cuts could push bond yields higher and cancel out any any stimulus. According to the Congressional Budget Office, while the tax bill would increase GDP growth by 0.5% on average over the next 10 years, it would also push up 10-year Treasury yields by 14 basis points and increase the deficit by $2.8 trillion. A stock market crash and economic downturn could actually be the turning point for Trump to reverse course on his policies, Berezin said. The S&P 500 dipping below 5,000 and the 10-year Treasury yield spiking above 4.5% probably influenced Trump to paus tariffs for 90 days, Berezin added. "We could get more tariff relief, but the market has to force that. I don't think it's going to come from any other source," he said. Read the original article on Business Insider

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Kroger To Close 60 Stores Across US: What To Know

Why a top market strategist says his base case is still a 25% stock drop and a recession in 2025

Why a top market strategist says his base case is still a 25% stock drop and a recession in 2025

Why Shares of Kroger Are Surging Today

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Kroger To Close 60 Stores Across US: What To Know

Why a top market strategist says his base case is still a 25% stock drop and a recession in 2025

Why a top market strategist says his base case is still a 25% stock drop and a recession in 2025

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