Kroger’s retail media arm is moving from an auxiliary revenue stream to a central growth engine. Kroger Precision Marketing grew profit 24% year over year in the second quarter, the strongest retail media profit growth the company has posted since 2021, CEO Greg Foran told investors on Friday.
The update came early in Kroger’s earnings call—ahead of traditional merchandising commentary—underscoring how central advertising and first-party data have become to the grocery chain’s strategy. Media monetization rose 88 basis points over the past year, while e-commerce sales increased 20%, marking a second consecutive quarter of profitable e-commerce growth.
A widening ad ecosystem
KPM attributed the performance to stronger on-site traffic and new ad formats for brand partners, including shopping assistant placements and expanded social and programmatic collaborations.
“Stronger collaboration between our merchandising and media teams expanded advertising inventory, and optimization efforts improved visibility and conversion for our brand partners,” Foran said.
The company has been layering retail media into multiple surfaces:
- AI shopping assistant: This summer, Kroger added advertising functions to its assistant across most grocery banners, letting shoppers plan meals, find recipes and build carts around budgets or dietary needs.
- Google partnership: Since March, advertisers can use Kroger data to plan YouTube and YouTube TV campaigns in Display & Video 360.
- TikTok partnership: A June tie-up lets brands reach Kroger shoppers through TikTok’s self-service ad platform.
- In-store screens: Kroger is expanding its digital screen network, including wine-and-spirits displays and end-cap screens in partnership with Barrows Connected Store.
The common thread: Kroger is using first-party purchase data to connect on-site, off-site and in-store placements, not just selling sponsored listings.
Why it matters for marketers
Kroger is treating retail media as an ecosystem rather than a set of isolated ad products. Drew Cashmore, chief strategy officer at Vantage, said the retailer is linking TikTok, CTV, Google and on-site inventory to transactional data, so brand investments can map more directly to the path to purchase.
Sean Crawford, managing director for North America at SMG, said retailers have to prove retail media can compete with social platforms for brand budgets. That means using first-party data to create offerings that “create something that advertisers feel is worth paying for and that they can’t get elsewhere.”
What to watch
Kroger’s leadership gives a clue about where this is heading. Foran previously led Walmart U.S. and helped shape Walmart Connect before joining Kroger. Cashmore, a former Walmart Connect leader, called Foran a “staunch advocate for retail media” and pointed to collaboration across merchandising, media, operations and marketing as a growth catalyst.
For marketing teams, the practical takeaway is to audit whether retail media partners can connect on-site, off-site and in-store signals. Test assistant-based placements early, ask for closed-loop reporting, and treat retail data as a strategic asset rather than a bottom-of-funnel add-on.
Source: Digiday
