2020 Fact Book Kroger At A Glance KROGER FACT BOOK 2020 2 Pick up and Delivery available to 97% of Custom- ers PICK UP AND DELIVERY 2,255 AVAILABLE TO PHARMACIES $132.5B AND ALMOST TOTAL 2020 SALES 271 MILLION 98% PRESCRIPTIONS FILLED HOUSEHOLDS 31 OF NEARLY WE COVER 45 500,000 640 ASSOCIATES MILLION DISTRIBUTION COMPANY-WIDE CENTERS MEALS 34 DONATED THROUGH 100 FEEDING AMERICA FOOD FOOD BANK PARTNERS PRODUCTION PLANTS ARE 35 STATES ACHIEVED 2,223 ZERO WASTE & THE DISTRICT PICK UP 81% 1,596 LOCATIONS WASTE OF COLUMBIA SUPERMARKET DIVERSION FUEL CENTERS FROM LANDFILLS COMPANY WIDE 90 MILLION POUNDS OF FOOD 2,742 RESCUED SUPERMARKETS & 2.3 MULTI-DEPARTMENT STORES BILLION kWh ONE OF AMERICA’S 9MCUSTOMERS $213M AVOIDED SINCE MOST RESPONSIBLE TO END HUNGER 2000 DAILY IN OUR COMMUNITIES COMPANIES OF 2021 AS RECOGNIZED BY NEWSWEEK KROGER FACT BOOK 2020 Table of Contents About 1 Overview 2 Letter to Shareholders 4 Restock Kroger and Our Priorities 10 Redefine Customer Expereince 11 Partner for Customer Value 26 Develop Talent 34 Live Our Purpose 39 Create Shareholder Value 42 Appendix 51 KROGER FACT BOOK 2020 ABOUT THE KROGER FACT BOOK This Fact Book provides certain financial and adjusted free cash flow goals may be affected changes in inflation or deflation in product and operating information about The Kroger Co. by: COVID-19 pandemic related factors, risks operating costs; stock repurchases; Kroger’s (Kroger®) and its consolidated subsidiaries. It is and challenges, including among others, the ability to retain pharmacy sales from third party intended to provide general information about length of time that the pandemic continues, payors; consolidation in the healthcare industry, Kroger and therefore does not include the new variants of the virus, the effect of the including pharmacy benefit managers; Kroger’s Company’s consolidated financial statements easing of restrictions, lack of access to vaccines ability to negotiate modifications to multi- and notes. On January 22, 2003, the SEC for certain populations and the extent of employer pension plans; natural disasters or issued release No. 33-8176 that set forth new vaccine aversion, the potential for future adverse weather conditions; the effect of public requirements relating to the disclosure of non- spikes in infection and illness rates and the health crises or other significant catastrophic GAAP financial measures, as defined in the corresponding potential for disruptions in events, including the coronavirus; the potential release. The release allows for presentation of workforce availability and customer shopping costs and risks associated with potential cyber- certain non-GAAP financial measures provided patterns, re-imposed restrictions in the event attacks or data security breaches; the success that the measures are reconciled to the most of resurgence, and interruptions in the global of Kroger’s future growth plans; the ability to directly comparable GAAP financial measure. supply chain or capacity constraints; the pace execute our growth strategy and value creation Any non-GAAP financial measure discussed in of recovery when the pandemic subsides; model, including continued cost savings, this Fact Book complies with this requirement. labor negotiations or disputes; changes in the growth of our alternative profit businesses, and More detailed financial information can be unemployment rate; pressures in the labor widening and deepening our strategic moats of found in Kroger’s filings with the SEC. market; changes in government-funded benefit fresh, our brands, personalization, and seamless; programs and the extent and effectiveness and the successful integration of merged This Fact Book contains certain statements of any COVID-19 stimulus packages; changes companies and new partnerships. Our ability to that constitute “forward-looking statements” in the types and numbers of businesses that achieve these goals may also be affected by our about the future performance of the company. compete with Kroger; pricing and promotional ability to manage the factors identified above. These statements are based on management’s activities of existing and new competitors, Our ability to execute our financial strategy may assumptions and beliefs in light of the including non-traditional competitors, and be affected by our ability to generate cash flow. information currently available to it. Such the aggressiveness of that competition; statements are indicated by words or phrases Kroger’s response to these actions; the state Kroger believes that the information contained such as “achieve,” “believe,” “contemplates,” of the economy, including interest rates, the in this Fact Book is correct in all material “continue,” “deliver,” “expect,” “future,” inflationary and deflationary trends in certain respects as of June 2021 or such earlier date as “guidance,” “strategy,” “target,” “trends,” and commodities; changes in tariffs; the effect that indicated. However, such information is subject “will.” Various uncertainties and other factors fuel costs have on consumer spending; volatility to change. Unless otherwise noted, reference to could cause actual results to differ materially of fuel margins; manufacturing commodity “years” is to Kroger’s fiscal years. from those contained in the forward-looking costs; diesel fuel costs related to Kroger’s Kroger assumes no obligation to update the statements. These include the specific risk logistics operations; trends in consumer information contained herein unless required by factors identified in “Risk Factors” in our annual spending; the extent to which Kroger’s applicable law. Please refer to Kroger’s reports report on Form 10-K for our last fiscal year and customers exercise caution in their purchasing and filings with the Securities and Exchange any subsequent filings, as well as the following: in response to economic conditions; the Commission for a further discussion of these uncertainty of economic growth or recession; Kroger’s ability to achieve sales, earnings, risks and uncertainties. incremental FIFO operating profit, and KROGER FACT BOOK 2020 1 OVERVIEW Kroger at a Glance Headquartered in Cincinnati, Ohio, The Kroger broadest geographic coverage and widest Co. is one of the largest retailers in the United variety of formats in the food retailing industry. States based on annual sales, holding the The merger also enabled Kroger to generate #17 ranking on the Fortune 100 list published significant economies of scale in purchasing, June 2021. Total company annual sales totaled manufacturing, information systems and $132.5 billion for fiscal year 2020. logistics. In 2014, Kroger finalized its merger with Harris Teeter bringing an exceptional Kroger was founded in 1883 and incorporated brand and a complementary base of stores in in 1902. Throughout its rich history, Kroger has high growth markets. Later in the year, Kroger served as an innovator and a pioneer in the merged with Vitacost.com, one of the largest food retail industry. In the early 1900’s, Barney pure e-commerce companies in the nutrition and Kroger became the first grocer in the country healthy living market. This merger accelerated to establish his own bakeries. Shortly after that Kroger’s entry into the e-commerce space he was also the first to sell meats and groceries by several years, bringing the ability to serve under one roof. We have demonstrated a long- customers through ship-to-home orders and standing commitment to food safety and expanding Kroger’s reach to all 50 states. quality. During the 1930s, Kroger was the first In 2015, Kroger finalized a merger with grocery chain to routinely monitor product Roundy’s bringing an expanded footprint and quality and scientifically test food. Technology innovative store format within the Wisconsin has also played a significant role in Kroger’s and Chicagoland areas under multiple banners growth. In 1972, Kroger became the first to the Kroger family of companies. In 2017, grocery retailer in America to test an electronic Kroger merged with Murray’s Cheese to bring scanner, reducing the customer wait time for fresh, quality specialty items to our customer check out and improving accuracy. Kroger has and has significantly grown the brand since continued to use technology to better serve the merger. Today, Murray’s Cheese is the our customers and developed QueVision, an number one cheese platform in our markets. innovative faster checkout program that has And in 2018, Kroger merged with Home Chef reduced the time customers wait in line to to redefine the grocery customer experience check out. We continue to innovate internally and accelerate meal kit market growth. and via external partnerships with industry leaders. Mergers and acquisitions have also played a key role in Kroger’s growth over the years. In 1983, Kroger merged with Dillon Companies Inc. in Kansas to become a coast-to-coast operator of food, drug and convenience stores. The biggest merger in Kroger’s history came in 1999 when Kroger merged with Fred Meyer to create a supermarket chain with the KROGER FACT BOOK 2020 2 OVERVIEW Our business today looks very different than it In the fall of 2017, the Company launched % of The Kroger Co. Amount did over 130 years ago when Barney Kroger first Revenue Restock Kroger at its annual Investor opened his doors but the business principles Conference, a strategic plan covering fiscal that made the first Kroger store successful Non Perishable (1) $71,434 53.9% years 2018 - 2020. Through Restock Kroger, in 1883 – service, selection, value and our we have made significant strategic choices commitment to our customers– continues to to evolve the business and financial model by Fresh (2) $33,449 25.2% guide the company’s operations. Our growth, focusing on our customers, our associates, innovation, partnerships and evolving business our purpose, and our shareholders. Kroger are aimed at satisfying the needs of our Supermarket Fuel $9,486 7.2% continues to improve the customer experience customers. “Be particular. Never sell anything by widening and deepening our competitive you would not want yourself” was the motto Pharmacy $11,388 8.6% moats.