The Kroger Co. is modernizing store operations around what it calls the “connected” store – a platform of digital shelf labels, RFID, robotics and AI designed to standardize work and free associates to serve customers, Mark Ibbotson, EVP and chief store operations officer, said at the company’s 2026 Investor Update on Oct. 20 in New York.
“I’ve spent my whole career in retail operations, and the fundamentals have not changed. Run great stores, serve customers well, and create value for our associates and shareholders,” Ibbotson said. “What is changing is the platform that enables us to do it better.”
One best way
The journey starts with operating principles: remove unnecessary work, standardize the essentials and design every routine for the reality of a busy store. “One best way” turns those principles into daily routines, standardized so that roughly 95 percent of stores can run the work consistently, including on the busiest days, while keeping local judgment.
“The technology will do the tedious, and we will design out failure, giving our associates more time for higher value, more interesting work,” he said.
Once work is standardized, it can be digitized: technology removes steps, guides the next action, verifies completion and surfaces what needs attention now, an out-of-stock, a fresh quality issue, a late pickup or a margin risk, routing the right action to the right person.
Labels, robots and AI
Kroger has installed more than 36 million digital shelf edge labels in 1,100 stores and expects them in more than 2,400 stores by 2029. Price and promotion changes that took days can move in minutes, and the labels double as an IoT platform: with Pick to Light, the shelf directs an associate or third-party shopper to the right item, improving pick accuracy by around 10 percent, while a future Shop to Light capability could help customers find products and extend retail media to the shelf edge.
About 900 robots are live, handling out-of-stocks, promotional display, price verification, top-stock detection and truck completion verification, with more than 2,100 expected by 2029. A specialized AI in-stock agent connects approximately 20 data pipelines to find the root cause of an out-of-stock and route issues, from sell-through to margin risk, to the merchant, field team or store that can act. Kroger has also chosen to share computer vision data with supplier partners: “That puts Kroger and our suppliers on the same signal, with the same objective: improve availability and sell more product,” Ibbotson said.
The connected store extends retail media into the aisle: when an opted-in customer shops with the Kroger app, a brand can reach them on their phone in front of the relevant shelf. Ibbotson drew a firm line on the data’s use: “Kroger does not and will not raise prices based on the person.”
The bakery proof point
RFID, piloted in bakery, shows the model working in one department: live in approximately 1,500 store bakeries with approximately 98 percent read performance, it has delivered nearly 70 percent faster inventory counts and 50 percent lower waste, helped by earlier markdown and expiration decisions, plus approximately 200 basis points of sales lift and nearly 50 basis points of category share gains as better inventory confidence reduces phantom inventory. RFID is expected to reach more than 2,300 stores by 2029.
Across the broader waste plan, Kroger targets approximately $500 million in savings by 2029, working every step from the buy to the shelf. “Better signals lead to better actions, and those actions improve the data we use the next time,” Ibbotson said.
He closed with the associate side of the equation, recounting a 30-year veteran at one of the most productive stores in the Nashville region who told him simply, “I love it.” The technology routes him straight to an out-of-stock instead of making him hunt for it, Ibbotson said; he finds his day-to-day work simpler and easier, and he feels invested in.