TacticScaleWhat Kroger Does & How It Makes Money (KR)
Updated October 2026 · reflects Kroger's latest reported financials
One of America's largest supermarket chains, selling groceries, pharmacy, and fuel. Kroger earns revenue mainly from selling groceries, fresh food, pharmacy products, and general merchandise through its stores and online, plus fuel sales at its fuel centers.
How Kroger makes money
Kroger earns revenue mainly from selling groceries, fresh food, pharmacy products, and general merchandise through its stores and online, plus fuel sales at its fuel centers. Making and processing some of its own food products lets it sell those under its own supply chain.
What Kroger does
The Kroger Co. is a U.S. food and drug retailer founded in 1883 and headquartered in Cincinnati, Ohio. It runs several store formats: combination food and drug stores with pharmacies, organic and natural sections, and fresh seafood; multi-department stores that also sell apparel, home furnishings, electronics, and toys; marketplace stores that combine full-service grocery with general merchandise; and price impact warehouses focused on low-cost groceries and fresh items. Beyond its stores, Kroger makes and processes food products that it sells in its supermarkets and online, and it operates fuel centers. Groceries, pharmacy, and fuel are everyday necessities, so the business sits in the consumer defensive sector, where demand tends to hold steady whatever the economy is doing.
Products & services
- Combination food and drug supermarkets
- In-store pharmacies
- Multi-department and marketplace stores
- Price impact warehouse stores
- Fuel centers
- Online grocery shopping
What is Kroger worth?
On an owner-earnings DCF, Kroger's most-likely value is about $54 versus a recent price near $62 (13% above fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$37) with a margin of safety — so the honest verdict here is “Fairly priced — no edge.” Fair value earns its keep only at the extremes, not in the wide middle.
Price sits in the normal range — fair value isn't actionable here; it earns its keep only when price drops below the no-growth floor, or runs to roughly double the optimistic case.
⚠ High leverage — net debt is 9.3× annual cash flow. Net debt is subtracted from this fair value, but refinancing at higher rates, principal timing, and share dilution aren’t modeled — the equity can be worth far less if cash flow weakens.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →
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Albertsons Companies (ACI) · Kohl's (KSS) · Walmart (WMT) · Grocery Outlet Holding (GO) · Target (TGT)