Melius Research sent a clear signal on April 1, 2025, by downgrading $KR from Hold to Sell, placing a new price target of $58 on the grocery giant. The firm cited intensifying competitive headwinds, particularly from Walmart, which has been steadily regaining ground with stronger pricing, better fresh product offerings, and enhanced digital execution.
Walmart’s aggressive strategy is drawing market share from traditional grocers, and Kroger is beginning to feel the squeeze. What’s more, Kroger’s internal leadership issues are raising eyebrows on Wall Street. With no permanent CEO in place and a CFO lacking deep grocery retail experience, confidence in the company’s strategic footing is waning.
➤ Walmart’s dominance in pricing and omnichannel shopping is crowding out Kroger’s value proposition.
➤ Leadership uncertainty adds another layer of risk at a time when clarity is needed most.
Still, Kroger hasn’t dropped the ball when it comes to shareholder returns.
✔️ The company continues to pay a reliable quarterly dividend of $0.32 per share.
✔️ Its forward dividend yield sits at around 1.92%, providing modest but stable income.
✔️ With a payout ratio of about 35%, the dividend remains comfortably supported by earnings.
So while Melius sees storm clouds ahead for $KR in terms of competition and leadership, income-focused investors may still find solace in the stock’s disciplined dividend approach. However, the downgrade serves as a warning that Kroger’s defensive moat may be thinning faster than expected.