2018 FACT BOOK KROGER AT A GLANCE

KROGER FACT BOOK 2018 2 SEAMLESS SHOPPING EXPERIENCE 222 AVAILABLE TO $ HEALTH CLINICS WITH 121B 1.3 MILLION TOTAL 2018 SALES VISITS LAST YEAR 91%OF CUSTOMERS 34 OF

NEARLY WE COVER 44 500,000 ASSOCIATES 316MILLION 36 DISTRIBUTION COMPANY-WIDE CENTERS MEALS FOOD DONATED THROUGH PRODUCTION 100 FEEDING AMERICA FOOD BANK PARTNERS PLANTS 35 STATES 2 MILLION ARE 1600 TONS OF WASTE & THE DISTRICT PICK UP 1,537 LOCATIONS DIVERTED OF COLUMBIA FROM LANDFILLS FUEL CENTERS 100 MILLION POUNDS OF FOOD RESCUED 2,761 & 11M 1.6 MULTI-DEPARTMENT STORES BILLION CUSTOMERS $192M KILOWATTS IN 2018 DONATIONS OF ELECTRICITY ON FORTUNE TO END HUNGER SAVED MAGAZINE'S 2018 DAILY IN OUR COMMUNITIES #6 CHANGE THE WORLD LIST

KROGER FACT BOOK 2018 TABLE OF CONTENTS

About 1 Overview 2 Letter to Shareholders 3 Restock Kroger and Our Priorities 8 Redefine Customer Expereince 9 Partner for Customer Value 19 Develop Talent 25 Live Our Purpose 29 Create Shareholder Value 32 Company Financial Metrics 42 Appendix 48

KROGER FACT BOOK 2018 ABOUT THE KROGER FACT BOOK

This Fact Book provides certain financial and ‘‘committed,’’ ‘‘continue,’’ ‘‘deliver,’’ ‘‘effect,’’ deflation in product and operating costs; stock operating information about The Kroger Co. ‘‘future,’’ ‘‘growth,’’ ‘‘imperative,’’ ‘‘may, ‘‘plan,’’ repurchases; our ability to retain pharmacy (Kroger®) and its consolidated subsidiaries. It is ‘‘reinventing;’’ ‘‘result,’’ ‘‘strategy,’’ ‘‘strong,’’ sales from third party payors; consolidation in intended to provide general information about ‘‘sustainable,’’ ‘‘transform,’’ ‘‘trend,’’ ‘‘vision,’’ and the healthcare industry, including pharmacy Kroger and therefore does not include the ‘‘will,’’ as well as similar words or phrases. These benefit managers; our ability to negotiate Company’s consolidated financial statements statements are subject to known and unknown modifications to multi-employer pension and notes. On January 22, 2003, the SEC risks, uncertainties and other important factors plans; natural disasters or adverse weather issued release No. 33-8176 that set forth new that could cause actual results and outcomes conditions; the potential costs and risks requirements relating to the disclosure of non- to differ materially from those contained in the associated with potential cyber-attacks or GAAP financial measures, as defined in the forward-looking statements. These include the data security breaches; the success of our release. The release allows for presentation of specific risk factors identified in ‘‘Risk Factors’’ future growth plans; the ability to execute on certain non-GAAP financial measures provided and ‘‘Outlook’’ in Kroger’s Annual Report on Restock Kroger; and the successful integration that the measures are reconciled to the most Form 10-K and any subsequent filings with the of merged companies and new partnerships. directly comparable GAAP financial measure. Securities and Exchange Commission. Our ability to achieve these goals may also be Any non-GAAP financial measure discussed in affected by our ability to manage the factors Our ability to achieve sales, earnings, this Fact Book complies with this requirement. identified above. Our ability to execute our incremental FIFO operating profit, and free More detailed financial information can be financial strategy may be affected by our cash flow goals may be affected by: labor found in Kroger’s filings with the SEC. ability to generate cash flow. negotiations or disputes; changes in the types This Fact Book contains ‘‘forward-looking and numbers of businesses that compete with Kroger believes that the information contained statements’’ within the meaning of the safe us; pricing and promotional activities of existing in this Fact Book is correct in all material harbor provisions of the United States Private and new competitors, including non-traditional respects as of May 2019 or such earlier date Securities Litigation Reform Act of 1995 about competitors, and the aggressiveness of that as indicated. However, such information is future performance of Kroger, including with competition; Our response to these actions; subject to change. Unless otherwise noted, respect to Kroger’s ability to achieve short- the state of the economy, including interest reference to “years” is to Kroger’s fiscal years. and long-term sales and earnings goals, rates, the inflationary and deflationary trends sustainable long-term shareholder value, in certain commodities, changes in tariffs, and ability to execute on our growth strategy and the unemployment rate; the effect that fuel business plan, ability to execute on Restock costs have on consumer spending; volatility of Kroger, ability to increase dividends, ability fuel margins; changes in government-funded to grow market share, and ability to develop benefit programs; manufacturing commodity new brands and implement new technologies, costs; diesel fuel costs related to our logistics among other statements. These statements operations; trends in consumer spending; are based on management’s assumptions and the extent to which our customers exercise beliefs in light of the information currently caution in their purchasing in response to available to it. These statements are indicated economic conditions; the uncertain pace of by words such as ‘‘achieve,’’ ‘‘believe,’’ economic growth; changes in inflation or

KROGER FACT BOOK 2018 1 RESTOCK KROGER AND OUR PRIORITIES OVERVIEW

Headquartered in Cincinnati, , The Kroger All of the Company’s operations are domestic. Co. is one of the largest retailers in the United States based on annual sales, holding the #20 % of The Kroger Co. # of Stores ranking on the Fortune 100 list published in Revenue May 2019. Kroger was founded in 1883 and incorporated in 1902. Supermarkets 2,764 95.1%

As of February 2, 2019, Kroger operated, Convenience Stores (1.) 0 0.8% either directly or through its subsidiaries, 2,764 supermarkets under a variety of local banner names, of which 2,270 had pharmacies Jewelry Stores (2.) 253 0.2% and 1,537 had fuel centers. We offer Pickup (formerly referred to as ClickList®) and Harris Other (3.) n/a 3.9% Teeter ExpressLane™— personalized, order Total 100% online, pick up at the store services — at 1,581 of our supermarkets and provide home 1. In April 2018 the Company completed a sale of the Convenience Store business to EG group. delivery service to 91% of Kroger households. 2. Includes 170 locations operated inside our supermarkets Approximately 54% of these supermarkets and 72 in shopping malls. were operated in Company-owned facilities, 3. Other sales primarily relate to sales at food production including some Company-owned buildings on plants to outside customers; data analytic services; variable interest entities; specialty pharmacy; in-store leased land. health clinics; digital coupon services; and online sales by .com®. Approximately 32% of Our Brands units and 43% of the grocery category Our Brands In the fall of 2017, the Company launched units sold in our supermarkets are produced Restock Kroger at its annual Investor in our food production plants; the remaining Conference. Restock Kroger has four main Our Brands items are produced to our strict pillars, which together create shareholder specifications by outside manufacturers. We value and allow us to better serve America perform a “make or buy” analysis on Our through food inspiration and uplift. These Brands products and decisions are based pillars are: upon a comparison of market-based transfer prices versus open market purchases. As • REDEFINE THE GROCERY CUSTOMER EXPERIENCE of February 2, 2019, we operated 37 food production plants. These plants consisted of 17 • EXPAND PARTNERSHIPS TO CREATE CUSTOMER VALUE dairies, ten deli or bakery plants, five grocery product plants, two beverage plants, one meat • DEVELOP TALENT plant, and two cheese plants. • LIVE OUR PURPOSE

KROGER FACT BOOK 2018 2 LETTER TO SHAREHOLDERS LETTER TO SHAREHOLDERS FELLOW SHAREHOLDERS:

2018 was year one of Restock Kroger, our three-year plan to create shareholder value by pursuing our vision to serve America through food inspiration and uplift.

I’m pleased to report that Kroger achieved what we set out to do last year. We delivered over $1 billion in savings through cost controls and process improvements, invested for the future, and delivered against our operating profit and cash flow goals.

Landing the first year of a three-year plan is always the toughest and most critical, since everything that follows depends on the foundation we’ve built. That foundation positions us to deliver on our 2020 Restock Kroger objectives and transform the company for long-term growth.

Restock Kroger is our commitment our customers, associates and communities. By serving these stakeholders, our shareholders are rewarded. We are investing for the future while also growing today. We are introducing new ways to shop, fresh foods to savor, and new ways to save, all so that our customers will love shopping with us. We are investing in our associates more than ever before. We are establishing new ways to live our Purpose through Zero Hunger | Zero Waste. And, through it all, we are reinventing the growth model. Together, this will transform Kroger for the better.

Of course, transformational change is hard, and we recognize that we have a lot of work to do. Just look at the Fortune 500 list. You can count about a dozen companies that have truly transformed themselves in the last 10-15 years. And fewer than a quarter of the companies who were on the list 30 years ago are here at all today. But transformation is an imperative, and we are energized by that today just as we always have been throughout our 136-year history.

Stakeholder expectations continue to evolve. Customers want to shop on their terms for anything, anytime, anywhere. Associates want more opportunities to grow, both personally and professionally, and to be a part of teams that respect and care about them. Shareholders rightly want sustainable, long-term growth and profitability – plus a growing dividend. And all stakeholders want to know that we are inspired by purpose and motivated by a vision that Kroger uniquely can deliver.

It’s an exciting time in the food retail industry. And even as the industry, our stakeholders and our company embrace change, several things remain constant: our relentless commitment to customers, our clarity of Purpose – To Feed the Human Spirit, and our customer Promise – everyone friendly and caring, everything fresh, uplift every way, and improve every day.

Restock Kroger has four main drivers: Redefine the Grocery Customer Experience, Partner for Customer Value, Develop Talent, and Live Our Purpose. Combined, these drivers come together to Create Shareholder Value through incremental operating profit and cash flow growth by 2020. Our long-term strategy and annual business plan are reviewed and approved by Kroger’s engaged Board of Directors.

KROGER FACT BOOK 2018 3 LETTER TO SHAREHOLDERS REDEFINE THE GROCERY CUSTOMER EXPERIENCE

We are transforming Kroger to be the leading omnichannel retailer in the food industry.

Our customers don’t distinguish between an in store and online experience; rather, they have a need or a problem to solve and want the easiest, most seamless solution. That could mean a delicious restaurant- style meal on the run, a meal kit for dinner tonight, an online order for Pickup or Delivery to stock up on grocery essentials for the week, a Ship order of pantry and household staples … and the list goes on. We are rapidly expanding our capabilities to be relevant, available and accessible to our customers in both digital and physical environments.

We’ve been building Kroger’s digital platform for several years. We are very pleased with the growth of digital sales, which grew 58% in 2018. The annual run rate for digital sales was about $5 billion at the end of 2018. Going forward, we are trending toward a run rate of $9 billion.

We continue working to seamlessly integrate our growing digital platform with our brick-and-mortar grocery business to serve customers anything, anytime, anywhere. At the end of 2018, we offered Pickup or Delivery to 91% of Kroger households. By the end of 2019, with full integration of Kroger Ship into our ecosystem, we will reach 100% of America.

Our Brands continues to shine. Our portfolio of brands grew at a record-setting pace in 2018, even reaching 30.5% unit share in the fourth quarter for the first time. Innovation remains a key driver of growth. We introduced 1,022 new items last year alone, which helped drive strong year-over-year sales lift across Kroger, Private Selection, and Simple Truth.

Simple Truth continued to outperform with double-digit sales growth in 2018. Simple Truth is now a $2.3 billion brand. Designed to be a solution for customers who don’t want to have to examine the label to understand what is in every product, all Simple Truth items are free from more than 101 ingredients that customers told us they don’t want in their food. And in 2018 we formed partnerships that offer new platforms to expand the brand’s reach even further, including our pilots with Walgreens and Alibaba’s TMall platform in China. PARTNER FOR CUSTOMER VALUE

Transformation requires innovative partnerships. We are identifying partners who will help us deliver customer value today and in the future.

We announced several exciting new partnerships in 2018, including , Microsoft, Nuro, and Ocado among others. All of these partnerships accelerate our ability to provide customers anything, anytime, anywhere. And each partner shares our passion for exploring the nexus between technology and innovative customer experiences.

I’d like to highlight two of these partnerships, Home Chef and Ocado. We merged with Home Chef, an online meal kit company, in 2018. What made Home Chef such a compelling merger partner is their combination of technology-enabled culinary expertise and customer data driven decision making. Home Chef is #1 in customer satisfaction among meal kit companies because they are relentlessly focused on the customer. They continue to grow and shape the meal solutions category. Shortly after our merger, Home Chef launched their first ever in-store meal kits. Today the products are available in nearly 700 locations and we have plans for further expansion.

KROGER FACT BOOK 2018 4 LETTER TO SHAREHOLDERS Our exclusive licensing agreement with Ocado, one of the world’s largest dedicated online grocery retailers, will enable Kroger to provide a faster, more curated ecommerce shopping experience for customers than ever before. The Ocado Smart Platform utilizes advanced robotics and efficient automated warehouse technology to create an end-to-end supply chain solution that will advance our already-strong supply chain infrastructure. What does that mean for customers? Fresher food, delivered faster, to enjoy longer. We’ve identified the locations for the first three Ocado customer fulfillment centers, or ‘‘sheds’’, in the U.S. – southwest Ohio, central Florida and the Mid-Atlantic region – and will name additional locations in 2019. DEVELOP TALENT

Transformation starts with our people, which is why Develop Talent is a driver of Restock Kroger. Our talent development strategy has three parts: investing in associates, improving the associate experience, and developing high performing teams and leaders.

We are investing an incremental $500 million in our associates over the three years of Restock Kroger. In 2018, we accelerated these planned investments to increase wages for our store associates. The federal tax reform was a catalyst enabling us to accelerate these investments. We chose to take a balanced approach to ensure tax reform benefited our shareholders, customers and associates alike. Shareholders are benefiting from approximately a third of the tax savings flowing through to net earnings per diluted share. Another third of the savings is being reinvested to improve the customer experience. And we are investing the final third to improve the associate experience through an increased 401k match, expanded associate discounts, and a new industry-leading education assistance program called Feed Your Future. Our combined efforts significantly improved employee retention in one of the tightest labor markets in years.

Feed Your Future strengthens human capital by improving access to education. We launched the program a year ago, which is available to all associates, full or part time, after six months of service. Among all the participants, 83% are hourly store associates.

Many people’s first job is in retail. Kroger has always been a place where people can ‘come for a job and stay for a career.’ And, certainly, our hope with programs like Feed Your Future is that associates will bring their educational growth back to Kroger through increased performance and responsibility. But whether or not an associate remains with Kroger for the long term, we know that the investment we are making in them is going to last. It is going to give that person a better life, which is going to make the world a better place. LIVE OUR PURPOSE

Increasingly, customers, associates and investors are choosing to shop with, work for and invest in companies that are purpose driven and making the world a better place. At Kroger, our Purpose is to Feed the Human Spirit. And while we live our purpose in large ways and small every day across our stores, manufacturing plants, distribution facilities and offices, one of the most innovative ways we Feed the Human Spirit is through our social impact plan, Zero Hunger | Zero Waste.

136 years in the grocery business have taught us a few things about people and about food. We know that meals matter. Families that share meals together have children who do better in all aspects of their lives. Yet there is a fundamental absurdity in the U.S. food system – 40% of the food produced here goes to waste, while 1 in 8 Americans struggle with hunger. In fact, 1 in 6 children go hungry every day. That just doesn’t make sense.

KROGER FACT BOOK 2018 5 LETTER TO SHAREHOLDERS We believe we can address this absurdity – perhaps better than anyone.

Zero Hunger | Zero Waste aims to end hunger in the places we call home and eliminate waste across the company by 2025.

In 2018, we celebrated several milestones on our journey. Kroger donated more than 316 million meals in food and funds to feed hungry families. That’s more than 100 million pounds of nutritious food directed to local Feeding America food banks, and enough to feed nearly 80,000 food insecure people for a whole year. Our teams increased recycling by nearly 20% across the company, bringing total waste diversion to 76% as we work toward zero waste-to-landfill.

Also, in 2018 Kroger became the first major U.S. retailer to commit to phasing out single-use plastic grocery bags and transition to more sustainable options to better protect the planet. And we were thrilled to be recognized on Fortune magazine’s Change the World 2018 list for using Kroger’s scale for good – engaging our business to solve society’s most complex issues – through Zero Hunger | Zero Waste.

We welcome you to join us on our journey, too. You can follow along at www.thekrogerco.com or #zerohungerzerowaste. CREATE SHAREHOLDER VALUE

We are transforming from a grocery company to a growth company.

We are creating a virtuous circle built on our grocery business and the data that business generates. We use data both to serve our more than 60 million customers better and to create new business opportunities that leverage our consumer insights.

We are improving our seamless ecosystem by offering customers incredible physical and digital experiences, great meals and amazing products, friendly and caring associates, and unprecedented convenience.

A constantly-improving customer ecosystem generates traffic, customer data and insights. These then fuel the growth of adjacent alternative profit streams like our Kroger Personal Finance, 84.51°, and Media businesses. It is worth noting that each of these businesses beat their operating profit targets for 2018. This was very encouraging because they are the biggest line items in our portfolio of alternative profit businesses.

It is a virtuous circle that works for customers and shareholders. Delivering an amazing customer experience creates incremental new profit streams, and new profit streams provide capital that can be reinvested in our core grocery business, making the seamless experience possible. Both parts are necessary to deliver sustainable, long-term growth and profitability. STRATEGIC SALE OF ASSETS

Throughout 2018 we explored strategic alternatives for several business units that had greater potential for growth outside of the Kroger ecosystem. Those explorations resulted in the sale of our Convenience Store business, YouTech, and business. These transactions generated value for shareholders and will allow for each of these businesses to reach their full potential. The sale of YouTech includes a long-term services agreement with Inmar to provide digital coupon services to the Kroger family of stores and we will continue to offer our customers Turkey Hill’s popular ice cream, iced teas, lemonades and other products.

KROGER FACT BOOK 2018 6 LETTER TO SHAREHOLDERS As America’s grocer, Kroger has the winning combination of local presence plus a digital ecosystem, enhanced by strategic partnerships, that together enable us to offer our customers anything, anytime, anywhere. We are deploying our assets to serve more customers and create asset-light, margin-rich alternative profit streams. We are living our Purpose and pursuing our Restock Kroger vision to serve America through food inspiration and uplift.

Very few Fortune 500 companies have transformed themselves since the list’s inception more than six decades ago. But Kroger has done so time and again by always focusing on the ever-evolving needs of our customers. We will transform because we have transformed, repeatedly, through our 136-year history.

When I think about Barney Kroger’s fledgling business on Pearl Street near the Ohio River delivering groceries to customer homes by horse-drawn carriage … and compare that to our business in Houston delivering groceries to customer homes by Nuro’s self-driving R1 robot … there are some dramatic differences but, really, it’s about the same thing: delivering for our customers. It’s just a different kind of horsepower.

For our associates: Thank you for what you do every day, for our customers, the communities we call home, and each other.

For our shareholders and other stakeholders: On behalf of all of us, thank you for your continued confidence in Kroger.

Sincerely,

Rodney McMullen Chairman and CEO Kroger

Safe Harbor Statement This letter contains ‘‘forward-looking statements’’ within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 about future performance of Kroger, including with respect to Kroger’s ability to achieve short- and long-term sales and earnings goals, sustainable long-term shareholder value, ability to execute on our growth strategy and business plan, ability to execute on Restock Kroger, ability to increase dividends, ability to grow market share, and ability to develop new brands and implement new technologies, among other statements. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. These statements are indicated by words such as ‘‘achieve,’’ ‘‘believe,’’ ‘‘committed,’’ ‘‘continue,’’ ‘‘deliver,’’ ‘‘effect,’’ ‘‘future,’’ ‘‘growth,’’ ‘‘imperative,’’ ‘‘may, ‘‘plan,’’ ‘‘reinventing;’’ ‘‘result,’’ ‘‘strategy,’’ ‘‘strong,’’ ‘‘sustainable,’’ ‘‘transform,’’ ‘‘trend,’’ ‘‘vision,’’ and ‘‘will,’’ as well as similar words or phrases. These statements are subject to known and unknown risks, uncertainties and other important factors that could cause actual results and outcomes to differ materially from those contained in the forward-looking statements. These include the specific risk factors identified in ‘‘Risk Factors’’ and ‘‘Outlook’’ in Kroger’s Annual Report on Form 10-K and any subsequent filings with the Securities and Exchange Commission.

KROGER FACT BOOK 2018 7 RESTOCK KROGER AND OUR PRIORITIES

RESTOCK KROGER PURPOSE: Feed the Human Spirit VISION:PURP ServingOSE: Feed America the Human th Spiritrough food inspiration and uplift VISION: Serving America through food inspiration and uplift REDREFEDIEFNEIN EG GROROCCEERYR CYX CX • Our Brands had its best year ever growing to reach a record 30.5% unit share • Our Binrands Q4 and had introducing its be 1s,0t22 y earnew ietemsver in g 2r0o18wing to reach a record 30.5% unit share in Q4• Simple and intTruthroducing led the wa y1 ,with022 15.3% new sales items growth in and 20 is18 now a $2.3B brand • Digital sales grew 58% and seamless coverage expanded to reach 91% of our customers • Simple• Identical Truth sales, led without the w fuel,ay withgrew 1.8% 15.3% in 2018 sales growth and is now a $2.3B brand • Digital sales grew 58% and seamless coverage expanded to reach 91% of our customers • Identical sales, without fuel, grew 1.8% in 2018 PARTNER FOR CUSTOMER VALUE CREATE • Achieved year one $1B cost savings goal SHAREHOLDER • Introduced partnerships with Tmall, Home Chef, Microsoft, Nuro, Ocado and Walgreens VALUE • Alternative profit streams including Kroger Personal Finance and Media beat CREATE PART opeNERrating pFrofitOR goals CUSTOMER VALUE Kroger solidly delivered on what we set out to do in 2018, which was an • Achieved year one $1B cost savings goal investment year that laid the SHAREHOLDER groundwork for us to achieve our 2020 • Introduced partnerships with Tmall, Home Chef, Microsoft, Nuro, Ocado and WalgRestrockeens Kroger targets including VALUE DEVELOP TALENT financials. As America’s grocer, Kroger • Alternative profit streams including Kroger Personal Finance and Media beat has the winning combination of local oper•a Launchedting pr ofitindustry goals leading educational assistance program Feed Your Future - presence plus a digital ecosystem Kroger solidly delivered on what we set 81% of recipients are hourly associates enhanced by strategic partnerships out to do in 2018, which was an • Retention rates improved double digits in the tightest labor market investment year that laid the • Continued to invest in our associates, $500M over Restock Kroger anything, anytime, anywhere. We are transforming from grocer to growth groundwork for us to achieve our 2020

company by deploying our assets to Restock Kroger targets including serve even more customers and create DEVELOP TALENT margin-rich alternative profit streams. financials. As America’s grocer, Kroger LIVE OUR PURPOSE We are well positioned to deliver on our has the winning combination of local Restock Kroger vision to serve America • Launched• Named industry#6 to Fortune leading’s Change educational the World list assistance program Feed Your Future - through food inspiration and uplift. presence plus a digital ecosystem 81% •of Launched recipients Kroger areZero hourlyHunger | Zassociatesero Waste Innovation Fund enhanced by strategic partnerships • Retention• First major rat esU.S. imp retailerro vtoed announ doublece phase digits out of in pla thestic bagstigh btye 2s0t25 labor market - Rodney McMullen, • Donated 316 million meals to food insecure families Chairman and CEO anything, anytime, anywhere. We are • Continued to invest in our associates, $500M over Restock Kroger transforming from grocer to growth company by deploying our assets to serve even more customers and create margin-rich alternative profit streams. LIVE OUR PURPOSE We are well positioned to deliver on our Restock Kroger vision to serve America KROGER• FACT Named BOOK 2018 #6 to Fortune’s Change the World list thr8ough food inspiration and uplift. • Launched Kroger Zero Hunger | Zero Waste Innovation Fund • First major U.S. retailer to announce phase out of plastic bags by 2025 - Rodney McMullen, • Donated 316 million meals to food insecure families Chairman and CEO REDEFINE THE CUSTOMER EXPERIENCE KROGER FACT BOOK 2018 9 REDEFINE THE GROCERY CUSTOMER EXPERIENCE DATA AND PERSONALIZATION

Data and science are at the core of our business. Our ability to capture shopping behavior data and combine it with advanced data science capabilities to understand our customers better than anyone sets us apart from the competition and is vital to our Restock Kroger strategy. We are continuing our journey to become the most personalized company in the world by collecting and connecting more data from both inside and outside of the Kroger ecosystem to help enhance our customer understanding and to guide decisions around the shopping experience (both in our store and online), new products and services, as well as customer communications. We also use data to optimize key activities including store ordering, labor management, equipment maintenance, energy effi ciency and more. IN 2018, KROGER AVERAGED 11 MILLION TRANSACTIONS EVERY DAY AND OF THOSE CAPTURED 97% WITH OUR LOYALTY CARD. Using transactions data, customer supplied information, as well as publicly available data, we are able to provide personalized experiences for each customer. These experiences make customers feel appreciated and inspired and allow us to gain both their loyalty and trust. Customer trust is very important to us and we make safeguarding the property and data we are able to collect a top priority.

KROGER FACT BOOK 2018 10 REDEFINE THE GROCERY CUSTOMER EXPERIENCE Using a sophisticated, proprietary suite of tools and technology, we turn customer data into actionable knowledge. We put the customer at the center of everything we do, resulting in a more dynamic, informed, and personal approach to driving customer loyalty.

Kroger cultivates a customer fi rst relationship and activates multiple touch points to provide the right content and the right products, all when, where and at the value our customers want. With new science and insight, we create increasingly personalized experiences through relevant communication and meaningful rewards that make our customers’ lives easier. MORE THAN 100 SCORING MODELS ARE USED TO DELIVER APPROXIMATELY 1 BILLION PERSONALIZED OFFERS TO OUR VALUED CUSTOMERS ANNUALLY. The number of households able to receive these communications increased in 2018 and approximately 60% of households receiving communications engaged with our program.

KROGER FACT BOOK 2018 11 REDEFINE THE GROCERY CUSTOMER EXPERIENCE DIGITAL

We know customer expectations and be- haviors are rapidly changing and Digital is evolving to meet those needs whenever and wherever; in-store or online. Our vision is to off er a seamless shopping experience for our customers no matter where they are, serving America through food inspira- tion and uplift. We are constantly building on our three strategic pillars of being; avail- able, accessible, and relevant.

In 2018, Digital sales grew 58% and we expanded our Pickup and Delivery services to cover 91% of Kroger households and As part of our mission to bring new customer launched Ship which is now available experiences to life, we are establishing nationwide. We optimized our core web partnerships with various companies here and mobile experiences based on customer in the US and abroad. Walgreens allows us feedback while introducing complimentary to increase our reach and get closer to the new experiences such as voice. customer, eff ectively shrinking the last mile while Ocado, a U.K.-based online grocer WE LEVERAGED OUR RICH specializing in delivery, will ensure we fulfi ll customers’ orders accurately and off ers CUSTOMER DATA TO HELP US additional opportunity to scale our business BETTER UNDERSTAND WHO and capabilities. Most importantly, none of OUR CUSTOMERS ARE AND these partnerships are single-purpose and are all interconnected with each other and CREATE AMAZING CUSTOMER our core assets. EXPERIENCES THAT ARE HIGHLY PERSONALIZED AS Our customers’ adoption of these new and enhanced off erings is fast-paced. WELL AS CURATED TO DRIVE This is refl ected in how quickly customers DISCOVERY AND INSPIRATION. are adopting our services and how much they appreciate the simplifi cation of the Customers responded by placing larger value experiences we put in front of them. They orders and increasing their conversion rate. are rewarding us with their loyalty and engagement. We are winning their share Digital is continuing to work towards of heart and mind and becoming a daily our vision of a seamless, omnichannel destination for our customers. That share of experience. At the heart of that is building mind and share of wallet ultimately play a a reliable and stable platform that will allow key role in helping drive the overall success us to keep our customer promise and serve of Kroger. their routine, immediate, and extended aisle grocery needs.

KROGER FACT BOOK 2018 12 REDEFINE THE GROCERY CUSTOMER EXPERIENCE SPACE OPTIMIZATION

A major component of the Redefi ning the Grocery Customer Experience pillar in Restock Kroger is space optimization. Stores continue to be our most important asset and we will leverage them more eff ectively. Our vision for store space and design involves using 84.51° customer science to optimize each store’s assortment, category space and layout thereby meeting the unique needs of that store’s customers. This includes understanding the optimal collection of products, categories, departments and services by store while also solving for the ideal layout of the store. DURING 2018, WE COMPLETED NEARLY 600 SPACE CHECKOUT OPTIMIZATION PROJECTS REGISTERS AND COLLECTIVELY TOUCHED APPROXIMATELY 1,000 STORES INCLUDING REMODELS AND TECHNOLOGY PROJECTS. WE CONTINUE TO STREAMLINE OUR EFFORTS AS WE COLLECT DATA FROM OUR 2018 PROJECTS.

KROGER FACT BOOK 2018 13 REDEFINE THE GROCERY CUSTOMER EXPERIENCE OUR BRANDS

$22 In addition to growing the core, Our Brands continued to launch new and distinctive platforms in 2018. Bromley’s For Men is our $20 45% new, premium Men’s Grooming & Shave brand, off ering high-quality, customizable solutions GROWTH for every man’s grooming needs. $18 45% SIMPLE TRUTH CONTINUED BILLIONS GROWTHTO OUTPERFORM WITH 15.3% $16 SALES GROWTH IN 2018 AND IS NOW A $2.3 BILLION BRAND. PRIVATE SELECTION GROWTH

$14 ACCELERATED, DELIVERING 2011 2018 DOUBLE DIGIT SALES GROWTH Moulin Francais is our new, premium Artisanal IN THE FOURTH QUARTER. AND Bread brand, delivering extraordinary small- Another key driver of Redefi ning the Grocery batch fl avor and textures in the best of rustic Customer Experience under Restock Kroger is KROGER BRAND REACHED A French baking tradition. We also refreshed Our Brands. Our portfolio of brands delivered KEY MILESTONE, DELIVERING our value brand design strategy to enhance record results in 2018, reaching a unit share of ANNUAL SALES OF MORE appeal to customers looking for good quality 30.5% in the fourth quarter for the fi rst time. THAN $13 BILLION IN 2018. products at a very aff ordable price. We introduced more than 1,000 new items in 2018, which helped drive strong year-over- In order to expand Our Brands’ reach even year sales lift across the three largest brands in further, in 2018 we formed partnerships that our stores: Kroger® Brand, Private Selection™ off er new platforms including pilots with and Simple Truth™. Walgreens and Alibaba’s TMall platform in China.

KROGER FACT BOOK 2018 14 REDEFINE THE GROCERY CUSTOMER EXPERIENCE MANUFACTURING Kroger Manufacturing is made up of 37 facilities. Our manufacturing plants produce breads, dairy products, meat and thousands of other grocery items. By manufacturing our own products, we lower our costs and pass the savings on to our customers. We invest both, in process improvements and automation and we constantly monitor our costs versus that of third parties to assure we are delivering high quality products at a competitive price. Additionally, we look for new products to bring DAIRY in house to lower costs to our customers. Kroger’s 17 dairies produce all varieties of fluid milk, orange juice, cultured products such as APPROXIMATELY 33% OF yogurt and cottage cheese, ice cream, novelty THE OUR BRANDS UNITS treats and non-carbonated beverages. In all of SOLD IN OUR STORES ARE our markets, our Banner Brand milk is the “na- PRODUCED IN OUR 37 tional brand” for most customers. Kroger also MANUFACTURING PLANTS. operates two cheese plants, which produce a variety of natural and processed cheeses for our supermarkets.

On April 29, 2019, we finalized the sale of Turkey Hill Dairy business to Peak Rock Capital with the intention to utilize after-tax proceeds to reduce debt.

DELI/BAKERY Six Kroger bakeries supply bread, cakes, donuts, cookies, bagels, muffins, crackers, snacks, and rolls to Kroger retail stores and outside customers. Two frozen dough plants in Bowling Green, KY, and , UT, supply frozen cakes and dough to our retail stores. Two Deli plants in Greensburg, IN, and Kenosha, WI, produce a wide variety of deli salads, soups, and side dishes. On February 11, 2019, we closed one of our Kroger Bakeries located in Columbus, OH.

KROGER FACT BOOK 2018 15 REDEFINE THE GROCERY CUSTOMER EXPERIENCE

GROCERY

Grocery products, beverages, and water are produced in Kroger’s five grocery and two beverage plants. Our Brands grocery items include pet foods, sugar- based products like drink mixes, hot cereal, coffee, spices, salad dressings and peanut butter. Beverages include Kroger’s Big K® soft drink line.

KROGER FACT BOOK 2018 16 REDEFINE THE GROCERY CUSTOMER EXPERIENCE MANUFACTURING FACILITIES

1 1 2 1 1 1 1 1 1 2 2 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

DAIRY DELI/BAKERY GROCERY MEAT Centennial Farms Dairy, GA Swan Island Dairy, OR Anderson Bakery, SC America’s Beverage, TX Ledbetter Meat, CO Compton Creamery, CA Tamarack Farms Dairy, OH Clackamas Bakery, OR Delight Products, TN Crossroad Farms Dairy, IN Tolleson Dairy, AZ Columbus Bakery, OH Kenlake Foods, KY Heritage Farms Dairy, TN Turkey Hill Dairy, PA Country Oven Bakery, KY Pontiac Foods, SC Hunter Farms Dairy, NC Vandervoort Dairy, TX Indianapolis Bakery, IN Springdale Ice Cream & Beverage, OH Jackson Dairy, KS Westover Dairy, VA KB Specialty Foods, IN State Avenue, OH Layton Dairy, UT Winchester Farms Dairy, KY Bakery, CO Tara Foods, GA Michigan Dairy, MI La Habra Bakery, CA Mountain View Foods, CO Layton Dough, UT Pace Dairy, MN RCK Foods, WI Pace Dairy of , IN Riverside Creamery, CA

KROGER FACT BOOK 2018 17 REDEFINE THE GROCERY CUSTOMER EXPERIENCE SMART PRICING

Since starting our pricing journey in 2000, Kroger has invested more than $4 billion in prices. Our goal is to take price off the table for our customers when deciding where to shop. As part of Restock Kroger, during 2018, we made the largest investment in price to date.

Kroger’s strategy is not to be the low-price leader. Instead, we view price as a key factor in driving Kroger’s overall value proposition. Our pricing strategy is based on three core pillars designed to ensure that we will not lose due to price:

Fair and consistent everyday pricing Best: Market-leading everyday prices on items customers buy most Good: Competitive prices on items sensitive to price perception Fair: Identify and adjust pricing on items priced significantly higher than competition

Great feature pricing Promotional discounts on core items to surprise and delight

Loyal Customer rewards Fuel, Best Customer Communications, digital coupons and Kroger Personal Finance rewards

Our investments, driven by customer insights from 84.51°, focus on providing value to our customers in the areas they tell us are most important.

KROGER FACT BOOK 2018 18 PARTNER FOR CUSTOMER VALUE KROGER FACT BOOK 2018 19 PARTNER FOR CUSTOMER VALUE A big driver of Restock Kroger is partnering Front End Transformation focuses on the Long term, our ability to personalize and to create customer value. We will drive customer, the Associate and the Business communicate directly with customers through the profitability through alternative profit Scan, Bag, Go® can become a significant streams while also taking costs out of the Utilizing our customer and operational data, competitive advantage. Scan, Bag, Go® can system via technology, infrastructure, cost in 2017 we completed a test and learn to become an additional element to our digital management, and a focus on COGS. understand how we can use the Scan, Bag, ecosystem designed to create a seamless, Go® technology combined with increased INFRASTRUCTURE & omni-channel customer connection from self-checkout utilization to improve the way home to store. TECHNOLOGY UPGRADES we interact with customers throughout the shopping experience and to reduce labor Front End Transformation costs. In this test, additional self-checkout and Checkout Experience TECHNOLOGY INNOVATION lanes were added, traditional check lanes were The Front End is one of the most impressionable reduced and Scan, Bag, Go® was introduced. The Research and Development (R&D) areas of the store when it comes to the department is committed to improving Customer Checkout experience. In 2018, we IN 2018, WE APPLIED Kroger’s shopping experience by delivering began to expand checkout options through LEARNINGS FROM OUR 2017 innovative solutions that reduce operating Scan, Bag, Go®. Checkout can become a costs. These funds can be invested back into TESTS AND EXPANDED OUR items visible to the customer and improve competitive point of difference because our REDEFINED CHECKOUT customers want more flexibility, payment the interactive customer experience by choices and control of their overall shopping EXPERIENCE TO 400 leveraging the Internet of Things, data and the experience. Redesigning the checkout ADDITIONAL STORES. AS management sciences. experience can eliminate one of the biggest A RESULT, WE HAVE SEEN To accomplish these goals, R&D continues to friction points in store for customers and DOUBLE-DIGIT IMPROVEMENT focus its efforts on creating platform solutions Associates, while delivering significant cost UTILIZATION, WHICH ALSO that deliver a competitive advantage today, savings for the future. DRIVES PRODUCTIVITY IN while paving a runway for successful projects THE STORES WHERE WE tomorrow. R&D’s efforts include digital smart shelves, computer vision, work automation IMPLEMENT THIS. and robotics to create intelligent systems for customer engagement solutions by leveraging machine learning, Kroger’s sensor network (IoT), video analytics and machine learning capabilities.

KROGER FACT BOOK 2018 20 PARTNER FOR CUSTOMER VALUE ALTERNATIVE PROFIT STREAMS

Kroger Personal Finance® Money Services Kroger Personal Finance (KPF) gives the Money Services destinations, located inside company a unique competitive advantage most of our stores, provide customers with by off ering money management solutions a variety of money management options at that empower and reward our customers. competitive prices, including: • Check and debit card cashing • Money orders • Money transfers • Walk-in bill payment • Prepaid wireless products • Prepaid debit cards

Gift Cards Mobile Market KPF off ers a wide variety of gift cards for The KPF Mobile Market off ers hundreds every occasion. Customers can purchase of prepaid airtime cards and dozens of Kroger REWARDS World Mastercard® gift cards for their favorite restaurant, phones from all the major carriers, including • The Kroger REWARDS World retailer, entertainment venue or online TracFone®, Simple Mobile®, Total Wireless, Mastercard® credit card off ers great media store at any Kroger Family store or AT&T Go Phone® and more. benefi ts and rewards to its cardholders, online at giftcards.kroger.com. Whether a customer is looking for a phone including: In addition, customers can also pick up for everyday use or just for emergencies, the • An additional 25¢ off per gallon Kroger Family of Companies gift cards Mobile Market has a phone and a plan for for ONE YEAR at Kroger Family of and variable load MasterCard®, Visa and Companies Fuel Centers. American Express® gift cards. everyone. • Free Groceries every three months Customers earn 2X fuel points on most In addition, customers save money off their with Rewards Certifi cates. In 2018, gift card purchases every day and 4X fuel monthly mobile phone bill and earn 2X fuel customers earned more than $46.6 points during promotional periods points in the process. million in Free Groceries! • A mobile app that makes managing their account easy and convenient

Rewards Prepaid Debit Cards The Rewards Prepaid Debit Card rewards customers with free groceries for every purchase they make. Customers also enjoy an additional 5¢ discount per gallon at our fuel centers and a mobile app that makes managing their account easy and convenient.

KROGER FACT BOOK 2018 21 PARTNER FOR CUSTOMER VALUE MEDIA Media Portfolio Highlights There are four core pillars where we welcome Kroger Precision Marketing is an extension of Loyalty Marketing: helps brands to connect with brands to connect with our customers in a our customer communications toolkit, driving our customers in authentic ways, discovering relevant way: relevance and fostering connections to create new product off erings and encouraging social real customer impact for brands across the sharing of their experiences. On Property: on our Kroger or Banner digital ecosystem: on Kroger properties, across websites (Kroger.com, .com, etc.), our In-Store: In conjunction with in-store adversiting, digital devices in the open web, and through app or emails we send, we fully engage with in 2018, we also began the commercialization social channels. our customers across their path to purchase of Enhanced Display for Grocery Environments in moments of discover, shop and buy. We (EDGE) which is a unique application of can infl uence over 20 million customers digital media in the grocery environment with on our own properties, maintaining a an unmatched proximity to the purchasing personalized experience through decision decision. EDGE works over an internet engines that continually optimize placement connection delivering rich media content selection based on performance and to digital shelf screens enabling endless demand signals. During 2018, we averaged The KPM portfolio is powered by 84.51° possibilities for real-time promotions. more than a 50% growth rate in visits on sciences, which leverage unparalleled fi rst- each of our properties every period. party datasets that fuel a sophisticated suite of tools, including machine learning techniques. Off Property: with fi rst-party data that The opportunity to partner with CPG These insights and targeting capabilities allow connects brands to more than 300 million companies to direct marketing spend in a advertisers to create relevant and meaningful devices, we off er the ability for advertisers way that is personalized and relevant to connections matched to an individual to serve up relevant co-branded ads our customers is signifi cant. We have the customer’s evolving preferences, solidifying through the chaos of messages in the ability to enhance our customers’ digital Kroger as their preferred destination. open web, encouraging our customers to experience, which will lead to increased sales discover their favorite products at Kroger. opportunities, plus the advertising revenue Secure use of our fi rst-party datasets is critical Our viewable impression rate is currently generated by these eff orts improves the to our relationship with our customers – above 70% while the industry average is profi tability of Kroger and allows us to invest anonymized protections are taken throughout approximately 50%. Customer privacy in other areas of the customer experience. to not compromise the privacy and trust our is paramount; all data is anonymized customers have instilled in us. KPM solutions throughout campaign executions. keep the customer at the center of every decision to ensure we deliver value throughout the shopping journey.

KROGER FACT BOOK 2018 22 PARTNER FOR CUSTOMER VALUE HEALTH AND WELLNESS

As the country’s largest food retailer, we recognize our ability and responsibility to offer healthy product choices and services for the more than eleven million customers we serve each day. We accomplish this through a number of programs and services. Wellness Your Way encompasses the offerings of our pharmacies and clinics, as well as our nutrition and activity-related initiatives and our over- the-counter wellness offerings. Reflecting that there are many individual paths to wellness, Wellness Your Way speaks to our customers in a supportive, integrated manner, embodying our vision of helping our customers live healthier lives.

OptUp is an innovative app that scores shoppers’ food purchases for nutritional value. Then, based on purchases, OptUp offers better-for-you options and delivers a metric for tracking improved nutrition. The household dashboard also lets you track progress and make nutritional changes over time.

The Little Clinic provides high quality, affordable healthcare located in convenient retail settings. Focusing on both preventative care and treatment, The Little Clinic is one more way we help people live healthier lives.

KROGER FACT BOOK 2018 23 PARTNER FOR CUSTOMER VALUE PARTNERSHIPS We announced several exciting new partnerships in 2018, including Home Chef, Microsoft, Nuro, Ocado and Walgreens among others. All of these partnerships accelerate our ability to provide customers, anything, anytime, anywhere. Each partnership shares our passion for exploring the nexus between technology and innovative customer experiences. Ocado Ocado will partner exclusively with Kroger Home Chef in the U.S., enhancing Kroger’s digital and Home Chef is #1 in customer satisfaction robotics capabilities and helping expand its among meal kit companies because they are seamless coverage area to provide every relentlessly focused on the customer. They family in America with the convenience of continue to grow and shape the meal solutions shopping for anything, anytime and anywhere. category through technology-enabled culinary The Ocado Smart Platform utilizes advanced expertise and customer data driven decision robotics and effi cient automated warehouse making. Shortly after our merger, Home Chef technology to create an end-to-end supply launched their fi rst ever in-store meal kits chain solution that will advance our already- in addition to their current online off erings. strong supply chain infrastructure which means Today the products are available in nearly fresher food, delivered faster, to enjoy longer. 700 locations and we have plans for further During 2018, we identifi ed the locations for the expansion. fi rst three Ocado customer fulfi llment centers, or “sheds”, in the U.S. – southwest Ohio, central Florida and the Mid-Atlantic region – and will name additional locations in 2019.

Anything, Anytime, Anywhere In conjunction with our goal to build a seamless ecosystem driven by data and technology Kroger continues to explore a multitude of opportunities via pilots. During 2018 we announced pilots with Microsoft, Nuro and Walgreens to further our reach and abilities to connect with our Customers, for anything, anytime, anywhere.

KROGER FACT BOOK 2018 24 DEVELOP TALENT DEVELOP TALENT OUR ASSOCIATES We also continue to improve our Diversity and Inclusion efforts – two of Our Values. We seek To deliver on Restock Kroger, we need to embrace differences in our backgrounds, talented, experienced associates. People are cultures and ethnicities, by encouraging our differentiator. When we create a place collaboration and active involvement with where associates love to work, we create a everyone. So every associate feels welcomed at place where customers love to shop. Kroger, and we ensure we treat our associates fairly. The Develop Talent pillar of Restock Kroger aims to do just that with three areas of focus – improving the associate experience, developing high-performing leaders and teams, and investing in and retaining store associates. IMPROVING THE ASSOCIATE EXPERIENCE

Our focus is to create an environment of continuous learning that helps our associates Named a Best Place to Work for LGBTQ feel supported to be their best and grow and Equality develop in their career. We are doing this Achieved a perfect score on the 2019 Cor- by focusing on critical moments through the porate Equality Index, the Human Rights associate life cycle – areas such as their Day Campaign Foundation’s national benchmark- 1 experience, role-based training, setting clear ing tool for corporate policies and practices expectations and providing uplifting feedback, supporting lesbian, gay, bisexual, transgender and rewarding and recognizing performance. and queer employees. Leadership focused on building relationships The Omni50 Awards is the most recognized and staying connected with associates honor for diversity and inclusion in the country. throughout their careers is foundational to our approach and supports our commitment Our Omnikal’s Omni50 ranking has raised to help our associates achieve their personal from 16th to 13th. and career aspirations, that is what is means to have Careers with Promise.

KROGER FACT BOOK 2018 26 DEVELOP TALENT DEVELOPING HIGH PERFORMING LEADERS AND TEAMS We believe that great leaders empower We also off er Kroger University, a DIVERSITY AND INCLUSION the associate experience, which drives the comprehensive training and leadership ARE AMONG KROGER’S customer experience. This is why we encourage development curriculum with two diff erent our associates to lead with a Passion for People levels: 1) skill-based training by role from VALUES. WE ARE COMMITTED and a Passion for Results. new-hire associate to store leader and 2) TO FOSTERING AN leadership development from department ENVIRONMENT OF INCLUSION Our Kroger Leadership Model (KLM) leader to executive. Our leadership training emphasizes the importance of how we achieve IN THE WORKPLACE, WHERE focuses on strengthening capabilities to DIVERSITY OF CULTURES AND results by identifying eight behaviors that develop leaders with strong business acumen deliver them. The KLM and its eight behaviors who can consistently perform at a high level OPINIONS IS VALUED AND are for all associates, not only leaders of others, and eff ectively coach, teach and train others. APPRECIATED. because we all have the ability to infl uence each other and impact results. Our rigorous talent review process helps us We provide inclusion training to all to identify and develop talent throughout management and many hourly associates, To support high performing leaders and teams, the organization, as well as identify where and most work locations (stores, plants, we continue to emphasize the importance of we have external talent needs. In 2018, we distribution centers and offi ces) have an setting clear and aligned objectives, providing focused on driving continuity in role based on inclusion-focused team, called Our Promise supportive and uplifting feedback, and having workforce analytics and the correlations to team. ongoing performance and development business results. We will continue to expand conversations with our associates. Ongoing talent reviews deeper into organization and conversations emphasize the importance focus on building a diverse bench of talent of not only focusing on “what” needs to be for every role. accomplished but also “how” to achieve results through and with others.

KROGER FACT BOOK 2018 27 DEVELOP TALENT INVESTING IN ASSOCIATES

We intend to pay competitively and offer In 2018, we enhanced several company- How We’ll Continue to Develop Talent benefits and perks that our associates highly sponsored benefits for management and value and find relevant to their lives and needs. administrative roles including the introduction We’re constantly looking to improve the of parental leave, adoption benefits and our associate experience, the benefits we offer to Our investments are driven by our data 401(k) plan match. We also introduced an associates and the development opportunities analytics research for specific areas to ensure industry-leading continuing education benefit for associates to learn and grow in their career. our wages are competitive with . known as Feed Your Future. The program There are a number of efforts underway to set We will continue our efforts to rebalance pay offers associates up to $3,500 annually (and to begin in the near future: and benefits, while also focusing on operational up to $21,000 over the course of your career) • Strategic partnerships with universities, flexibility for our stores. For example, we’re to improve every day through education educational institutions and community hiring wall-to-wall clerks that are cross-trained that works for you. All part-time and full- partners to improve how we attract and empowered to help in any area of the time associates are eligible after six months candidates from all backgrounds and store, as needs arise. We’re also targeting our of service. In Feed Your Future’s first year, ethnicities recruiting to for critical roles and rewarding associates are actively participating in this associates for training certifications and job program with over 80% of participants being • Leverage Machine Learning, Chatbot performance. hourly associates. and AI tools throughout the entire talent We continue to rebalance our wage and acquisition process benefits offering by redirecting additional DURING THE FIRST FULL • New sources of talent to support our money from health care and pension to YEAR OF FEED YOUR FUTURE, core, beyond the core, innovation and wages. We participate in approximately 360 KROGER REIMBURSED partnerships collective bargaining agreements that cover ASSOCIATES FOR $2.9 MILLION the compensation and benefits provided to • Increasing mix of external talent, including the majority of our Associates. Through 2018, OF TUITION senior operating leadership roles our efforts to rebalance pay and benefits have been implemented in over 150 collective • Continue to leverage workforce analytics bargaining agreements, which encompass and business insights to drive our decisions over 150,000 associates. to support the associate experience, customer experience and results (e.g., Our objective in every negotiation is to store continuity, learning impact, talent find a fair and reasonable balance between readiness and diversity) competitive costs and compensation packages that provide market competitive wages, good quality, affordable health care, and retirement benefits for our associates. We continue to strive to make our overall benefit package relevant to today’s associates.

Our average hourly rate, inclusive of benefits, for store associates was more than $18 in 2018.

KROGER FACT BOOK 2018 28 LIVE OUR PURPOSE LIVE OUR PURPOSE

ZERO HUNGER | ZERO WASTE

Kroger’s Zero Hunger | Zero Waste social In recognition of Zero Hunger | Zero Waste, impact plan was inspired by Our Purpose – to Kroger was named to Fortune magazine’s Feed the Human Spirit™. As part of our Restock Change the World list in 2018, debuting in the Kroger plan, it’s also how we live Our Purpose sixth spot. We are humbled by this – and more every day. Our Zero Hunger | Zero Waste determined than ever to use our size and scale commitment, introduced in 2017, evolved from for good. a strategic look at what was authentic to our past and what is needed to drive positive A world with Zero Hunger | Zero Waste: that’s change in our communities today and in the our vision. We have a seven-point plan to future. guide us along the way. In addition to these points, we continue to add as we discover Zero Hunger | Zero Waste addresses a additional ways to impact our communities fundamental absurdity in our food system: and the world. In 2018, we announced we will an estimated 40% of the food produced in phase out single-use plastic bags by 2025. the U.S. is thrown away, yet 1 in 8 Americans experiences hunger.

As America’s grocer, we believe we have to do something about that. Perhaps more importantly, we believe we can address this absurdity because we have both the scale and local connections within our communities to tackle this challenge.

KROGER FACT BOOK 2018 30 LIVE OUR PURPOSE ZERO HUNGER | ZERO WASTE

Above is a summary of our 2018 results. For additional information, please see our most recent sustainability report at www.thekrogerco.com/sustainability.

KROGER FACT BOOK 2018 31 CREATE SHAREHOLDER VALUE CREATE SHAREHOLDER VALUE THE DRIVERS 2018-2020 The drivers of Restock Kroger – Redefine the Grocery Customer Experience, Partner to Incremental Incremental Operating Operating Create Customer Value, Develop Talent and Shareholder Value Margin Margin Live Our Purpose – will all result in creating Growth Investment shareholder value through $400 million in incremental FIFO operating profit over the Redefine Customer $2,300M $3,100M ($800M) next three years (2018-2020) Experience Kroger’s financial strategy is to use its free cash Partner for $1,775M $400M $1,375M flow to drive growth while also maintaining Customer Value its current investment grade debt rating and returning capital to shareholders. The company Develop Talent $375M $500M ($125M) continually balances the use of its cash flow to achieve these goals. Live Our Purpose $50M ($50M)

$4,450M $4,050M $400M

FREE CASH FLOW Free Cash Flow 2015-2017 2018-2020E Kroger’s operations generate substantial cash flow and we believe it is important to Operating Cash Flow $12.6B $15.5B allocate that cash among various priorities in a balanced manner to benefit our shareholders. Capital Investments ($10.2B) ($9.0B) The following table shows Kroger’s 3-year free cash flow trend, including estimated free cash Free Cash Flow $2.5B $6.5B flow for 2018-2020:

KROGER FACT BOOK 2018 33 CREATE SHAREHOLDER VALUE CAPITAL INVESTMENT PLAN

For 2018, we revised our capital allocation We primarily target existing markets for new planning process. Going forward we will start stores. In our experience, such “in-market” by allocating capital to the Restock Kroger growth generally produces higher returns, initiatives, including digital, technology and with a lower level of risk, by leveraging fixed space optimization, then allocate capital to store expenses such as warehousing, transportation, projects. In the past, store projects received advertising, and other overhead costs across first allocation priority. This approach focuses an expanding store base. our capital investments on the priorities that At year-end, approximately 54% of the drive sales and deliver cost savings to support Company’s 2,764 supermarkets were owned Restock Kroger. Over the next three years, by Kroger. Our current strategy emphasizes we plan to invest approximately $9 billion in self-development and ownership of real estate. capital, excluding mergers, acquisitions and purchases of leased facilities.

Capital spending decisions for new stores, relocations and expansions will continue to be made centrally by evaluating all investment opportunities across the enterprise and allocating capital to the highest return projects available. We allocate capital to projects that we expect to earn a rate of return in excess of our internal after-tax hurdle rate of 11.3%. The capital investment plan will be funded entirely from free cash flow, as illustrated in the section above.

Total capital investments for 2018 were $3 billion, excluding mergers, acquisitions and purchases of leased facilities. Approximately 40% of Kroger’s 2017 capital investments were used to build, acquire, expand or complete major remodels of food stores. The balance was allocated among fuel projects, minor remodels and maintenance, and the Company’s other operating and administrative segments including jewelry stores, manufacturing, technology, logistics/distribution, and other miscellaneous projects.

*Investments prior to the 2018 launch of Restock Kroger have been grouped into representative categories of Restock Kroger.

KROGER FACT BOOK 2018 34 REAL ESTATE ACTIVITY BY QUARTER

FY 2016 Q1 Q2 Q3 Q4 YEAR

Beginning # Stores 2,778 2,778 2,781 2,796 2,778

New 8 12 20 10 50

Acquired – New 0 0 0 0 0

Acquired – Relocation 1 0 0 0 1

Relocations 4 4 11 2 31

Total Stores Opened 13 16 31 12 72

Expansions 4 2 4 4 14

Total Store Projects 17 18 35 16 86

Operational Closures (8) (9) (5) (10) (32)

Ending # Stores 2,778 2,781 2,796 2,796 2,796

Major Remodels (>$20/sq ft) 16 48 55 35 154

Minor Remodels (<$20/sq ft) N/A N/A N/A N/A 368

Square Footage (millions) 173.9 174.9 176.9 177.8 177.8

Year-Over-Year % Increase 7.1% 7.7% 8.7% 2.5% 2.5%

Convenience Stores 785 785 787 784 784

Jewelry Stores 323 323 324 319 319

Fuel Centers 1,400 1,423 1,439 1,445 1,445

Pharmacies 2,230 2,240 2,253 2,255 2,255

KROGER FACT BOOK 2018 35 REAL ESTATE ACTIVITY BY QUARTER

FY 2017 Q1 Q2 Q3 Q4 YEAR

Beginning # Stores 2,796 2,792 2,793 2,789 2,796

New 5 10 6 3 24

Acquired – New 0 0 0 3 3

Acquired – Relocation 0 0 0 0 0

Relocations 5 4 3 3 15

Total Stores Opened 10 14 9 9 42

Expansions 5 1 2 4 12

Total Store Projects 15 15 11 13 54

Operational Closures (9) (9) (9) (13) (40)

Ending # Stores 2,792 2,793 2,790 2,782 2,782

Major Remodels (>$20/sq ft) 7 31 65 65 168

Minor Remodels (<$20/sq ft) N/A N/A N/A N/A 275

Square Footage (millions) 178.2 179.6 178.9 179.0 179.1

Year-Over-Year % Increase 2.4% 2.6% 1.0% 0.7% 0.7%

Convenience Stores 782 783 783 782 782

Jewelry Stores 311 307 306 274 274

Fuel Centers 1,453 1,472 1,480 1,489 1,489

Pharmacies 2,255 2,258 2,266 2,268 2,268

KROGER FACT BOOK 2018 36 REAL ESTATE ACTIVITY BY QUARTER

FY 2018 Q1 Q2 Q3 Q4 YEAR

Beginning # Stores 2,782 2,779 2,769 2,765 2,782

New 2 5 2 1 10

Acquired – New 3 1 0 3 7

Acquired – Relocation 0 1 1 2 4

Relocations 0 0 0 <2> <2>

Total Stores Opened 5 7 3 4 19

Expansions 0 1 1 1 3

Total Store Projects 5 8 4 5 22

Operational Closures <8> <16> <6> <5> <35>

Ending # Stores 2,779 2,796 2,765 2,764 2,764

Major Remodels (>$20/sq ft) 26 46 61 50 183

Minor Remodels (<$20/sq ft) n/a n/a n/a n/a 246

Square Footage (millions) 179.2 178.9 179.0 179.3 179.3

Year-Over-Year % Increase 0.5% (0.4%) 0.1% 0.1% 0.1%

Convenience Stores 780 0 0 0 0

Jewelry Stores 269 267 263 253 253

Fuel Centers 1,522 1,523* 1,532 1,537 1,537

Pharmacies 2,274 2,271 2,270 2,270 2,270

KROGER FACT BOOK 2018 * The remaining C-stores are now being classified as fuel centers. 37 CREATE SHAREHOLDER VALUE SHARE REPURCHASE PROGRAMS DIVIDENDS

We maintain share repurchase programs that The shares repurchased in 2018 were reacquired Kroger’s quarterly dividend program was comply with Rule 10b5-1 of the Securities under the following repurchase programs reinstated by our Board in March 2006. During Exchange Act of 1934 and allow for the orderly authorized by the Board of Directors to reacquire 2018, we paid two quarterly dividends of $0.125 repurchase of our common shares, from time shares via open market purchases: and two quarterly dividends of $0.140. Kroger to time. The share repurchase programs do not paid a total of $437 million, $443 million and • On June 22, 2017, our Board of Directors have an expiration date but may be suspended $429 million in cash dividends during 2018, approved a $1.0 billion share repurchase or terminated by our Board of Directors at any 2017 and 2016, respectively. program (the “June 2017 Repurchase time. We made open market purchases of our Program”). This program was exhausted Our Board reviews the dividend annually, common shares totaling $727 million in 2018, during the first quarter of 2018. $1.6 billion in 2017 and $1.7 billion in 2016 under with an objective of increasing the amount of these repurchase programs. In addition to • On March 15, 2018, our Board of Directors the dividend over time. Any changes in the these repurchase programs, we also repurchase approved a $1.0 billion share repurchase dividend amount are made after consideration common shares to reduce dilution resulting program, to supplement the June 2017 of the needs of the business, the interests of from our employee stock option plans. This Repurchase Program, to reacquire shares shareholders, cash flow trends, and other via open market purchase or privately program is solely funded by proceeds from factors. negotiated transactions, including stock option exercises, and the tax benefit from accelerated stock repurchase transactions, these exercises. We repurchased approximately block trades, or pursuant to trades $83 million in 2018, $66 million in 2017 and $105 intending to comply with rule 10b5-1 of million in 2016 of our common shares under the the Securities Exchange Act of 1934 (the stock option program. “March 2018 Repurchase Program”).

• On April 19, 2018, our Board of Directors approved a $1.2 billion ASR program to reacquire shares in privately negotiated transactions. This program was exhausted during the second quarter of 2018.

During the first quarter through March 28, 2019, we repurchased an additional $9 million of our common shares under the stock option program and no additional shares under the March 2018 Repurchase Program. As of March 28, 2019, we have $546 million remaining under the March 2018 Repurchase Program.

KROGER FACT BOOK 2018 38 CREATE SHAREHOLDER VALUE MERGER & ACQUISITION STRATEGY

Kroger’s merger & acquisition strategy focuses on identifying opportunities to bring physical, intangible and human assets into the Kroger organization to enhance or accelerate achievement of our corporate priorities. We apply a disciplined, multi-functional review process of both financial and non-financial attributes of potential merger/acquisition candidates to maximize the probability of shareholder value creation. With all mergers, Kroger strives to ensure both parties provide synergies to the relationship to enhance value.

Kroger’s supermarket merger/acquisition strategy focuses primarily on existing markets. Such “in-market” mergers/acquisitions have lower risk and generally produce a higher incremental return because they require little investment in overhead, advertising, and distribution. The ® and Roundy’s® mergers, while offering entry into new markets for Kroger, also provide synergy opportunities based upon each partner’s areas of operating excellence applicable across our large base of existing assets. Since 2012, Kroger has become more focused on potential merger partners that enhance our ability to deliver value to our customers in expanded ways and support our strategic initiatives such as Restock Kroger.

KROGER FACT BOOK 2018 39 Mergers/Acquisitions Date # Stores (A) Location Banner Change?

Buehler Food Markets Apr-06 1 Louisville, KY Yes

Scott’s Food & Pharmacy Apr-07 18 Fort Wayne, IN Yes

Farmer Jack Jun-07 20 Detroit, MI Yes

Individual stores 2007 2 Various Yes

Individual stores 2008 9 Various Yes

AWG Jan-10 7 Topeka & Wichita, KS Yes

Brookshires Mar-10 2 Jackson, MS Yes

Albertsons Jun-10 1 Ft. Worth, TX Yes

Individual store Apr-11 1 Bloomfield, IN Yes

Schnuck’s (supermarket) Sept-11 8 Memphis, TN Yes

Schnuck’s (c-stores) Sept-11 7 Memphis, TN Yes

Axium Pharmacy Dec-12 Specialty Rx Lake Mary, FL N/A

Harris Teeter Jan-14 227 Multiple No

YOU Technology Feb-14 Technology San Francisco, CA N/A

Vitacost.com Aug-14 E-Comm Boca Raton, FL N/A

84.51° Apr-15 Technology Cincinnati, OH N/A

Hiller’s Jul-15 7 Detroit, MI Yes

Roundy’s (various banners) Dec-15 151 /Chicago No

Minyard Sun Fresh Jan-16 1 Plano, TX Yes

Market6 Aug-16 Technology Deerfield, IL N/A

ModernHEALTH Sep-16 Specialty Rx Orlando, FL N/A

Murray’s Cheese Jan-17 2 City, NY No

Marsh Jul-17 11 Indianapolis, IN Yes

Farm Fresh May-18 18 Hampton Roads, VA Yes

Home Chef May-18 Meal Kit Chicago, IL N/A

Shopko Pharmacies Jan-19 Rx Script Files Green Bay, WI N/A

KROGER FACT BOOK 2018 *(A) Represents stores acquired. Kroger may not operate all. 40 CREATE SHAREHOLDER VALUE MARKET SHARE

For the fourteenth year in a row, Kroger captured more share of the massive food market. Our consistent market share gains drive top and bottom line growth and generate lasting shareholder value.

We report market share annually, and look at it the way customers would look at it – where they spend their money. In 2017 we began using IRI POS+ data to measure market share. This data includes point of sale data from several competitors and includes all departments inside our stores, except for pharmacy, fuel, supplies, floral, gift cards and some general merchandise. The data is generated by retailers who report their sales to IRI. Top retailers who do not report: , Dollar Tree, Whole Foods, Sprouts, , Trader Joes, and Food Independents. IRI projects sales for all non-reporters except for Costco and Dollar Tree.

POS+ captures roughly 96% of the items we sell, including UPC-coded items, PLU items, and random weight perishable items, making it a good and consistent source. According to IRI POS+ data, Kroger’s overall market share of the products we sell in the markets where we operate was up slightly during 2018. This data also indicates we maintained or increased market share in 14 of the 21 markets outlined by IRI.

KROGER FACT BOOK 2018 41 COMPANY FINANCIAL METRICS APPENDIX IDENTICAL SUPERMARKET SALES

Identical supermarket sales are a key measure of health in the retail food industry. Kroger defines a supermarket as “identical” when it has been open without expansion or relocation for five full quarters. Other companies in our industry may calculate identical sales differently than Kroger does, limiting the comparability of this measure.

The chart below depicts identical supermarket sales trends excluding supermarket fuel sales, for the last seven years.

IDENTICAL SUPERMARKET SALES EXCLUDING FUEL

• Note that fuel discounts used at our fuel centers (earned based on in- store purchases) reduce the identical sales for our supermarkets. • During 2018 we modified the definition of ID sales. FY 2017 and 2018 above reflect this change.

KROGER FACT BOOK 2018 43 FINANCIAL AND OPERATING STATISTICS (in millions, except per share amounts) SALES Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $37,530 $27,869 $27,672 $28,091 $121,162

2017 $36,285 $27,597 $27,749 $31,031 $122,662

2016 $34,604 $26,565 $26,557 $27,611 $115,337

MERCHANDISE COSTS (B) (C) Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $29,362 $21,930 $21,699 $21,902 $94,894

2017 $28,281 $21,609 $21,532 $24,240 $95,662

2016 $26,669 $20,697 $20,653 $21,483 $89,502

OPERATING, GENERAL & ADMINISTRATIVE (C) Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $6,122 $4,612 $4,556 $5,013 $20,305

2018 Adj. $6,134 $4,612 $4,557 $4,773 $20,077

2017 $6,367 $4,517 $4,701 $5,456 $21,041

2017 Adj. $5,983 $4,516 $4,702 $4,995 $20,196

2016 $5,779 $4,473 $4,443 $4,483 $19,162

2016 Adj. $5,779 $4,362 $4,443 $4,483 $19,067

KROGER FACT BOOK 2018 44 INTEREST EXPENSE Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $192 $144 $142 $142 $620

2017 $177 $138 $136 $148 $601

2016 $155 $116 $124 $126 $522

EARNINGS / (LOSS) BEFORE INCOME TAX EXPENSE (C) Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $2,634 $628 $399 $317 $3,978

2018 Adj. $800 $401 $499 $483 $2,183

2017 $445 $540 $604 ($104) $1,484

2017 Adj. $829 $540 $604 $841 $2,812

2016 $1,045 $549 $589 $732 $2,914

2016 Adj. $1,045 $660 $589 $732 $3,025

INCOME TAX EXPENSE (C) Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $616 $127 $91 $66 $900

2018 Adj. $182 $72 $115 $102 $471

2017 $148 $189 $215 ($957) ($405)

2017 Adj. $289 $189 $215 $280 $973

2016 $350 $171 $206 $230 $957

2016 Adj. $351 $210 $206 $230 $997

KROGER FACT BOOK 2018 45 NET EARNINGS / (LOSS) INCLUDING NONCONTROLLING INTERESTS (C) Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $2,018 $501 $308 $251 $3,078

2018 Adj. $618 $329 $385 $381 $1,713

2017 $297 $351 $389 $853 $1,889

2017 Adj. $540 $351 $389 $561 $1,840

2016 $695 $378 $383 $502 $1,957

2016 Adj. $695 $449 $383 $501 $2,028

NET EARNINGS / (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 ($8) ($7) ($9) ($8) ($32)

2017 ($6) ($2) ($8) ($1) ($18)

2016 ($1) ($5) ($8) ($4) ($18)

NET EARNINGS / (LOSS) ATTRIBUTABLE TO THE KROGER CO. (C) Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $2,026 $508 $317 $259 $3,110

2018 Adj. $626 $336 $394 $390 $1,745

2017 $303 $353 $397 $854 $1,907

2017 Adj. $546 $353 $397 $562 $1,858

2016 $696 $383 $391 $506 $1,975

2016 Adj. $695 $455 $391 $506 $2,046

KROGER FACT BOOK 2018 46 NET EARNINGS / (LOSS) ATTRIBUTABLE TO THE KROGER CO. PER DILUTED COMMON SHARE (C) Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 $2.37 $0.62 $0.39 $0.32 $3.76

2018 Adj. 0.73 0.41 $0.48 $0.48 $2.11

2017 $0.32 $0.39 $0.44 $0.97 $2.09

2017 Adj. $0.58 $0.39 $0.44 $0.63 $2.04

2016 $0.71 $0.40 $0.41 $0.53 $2.05

2016 Adj. $0.71 $0.47 $0.41 $0.53 $2.12

AVERAGE NUMBER OF COMMON SHARES USED IN DILUTED CALCULATION Q1 Q2 Q3 Q4 Year (16 WEEKS) (12 WEEKS) (12 WEEKS) (12-13 WEEKS) (A) (52-53 weeks) (A)

2018 846 805 807 806 818

2017 925 905 893 884 904

2016 966 959 953 943 958

(A) Q4 2017 and Total Year 2017 include the impact of a 53rd fiscal week. (B) Includes advertising, warehousing, and transportation. (C) 2016 Adj. includes the gain from the adoption of the new Stock Compensation Standard. 2017 Adj. includes: 1. operating, general and administrative expenses for obligations related to withdrawing from and settlements of withdrawal liabilities for certain mulit-employer pension funds, the volunteer retirement offering, the Kroger Specialty Pharmacy goodwill impairment, and a company-sponsored pension plan termination, 2. reduction to depreciation and amortization expenses related to held for sale assets, and 3. reduction to income tax expense primarily due to the re-measurement of deferred tax liabilities and the reduction of statutory rate for the last five weeks of the fiscal year from the Tax Cuts and Jobs Act.

Note: Certain amounts may not sum accurately due to rounding.

KROGER FACT BOOK 2018 47 APPENDIX APPENDIX GEOGRAPHY & MARKETS

At the end of 2018, Kroger (either directly or through our subsidiaries) operated 2,764 supermarkets in 35 states and the District of Columbia under more than twenty banners listed below. Kroger has grown through organic growth and acquisition and we believe strongly in maintaining local banners where appropriate.

KROGER FACT BOOK 2018 49 State Banners Y/E 2018 Y/E 2017

California , Foods Co., Ralphs 306 306

Texas Kroger, Kroger Marketplace 213 212

Ohio Kroger, Kroger Marketplace, 209 209

Georgia Kroger, Kroger Marketplace, Harris Teeter 169 170

Jay C, Kroger, Kroger Marketplace, Owen’s, Pay Less Super Indiana 156 156 Markets, Ruler Foods

Colorado City Market, King Soopers, King Soopers Marketplace 149 148

North Carolina Kroger, Harris Teeter 145 163

Arizona Fry’s Food Stores, Fry’s Marketplace, Smith’s 126 126

Michigan Kroger, Kroger Marketplace 123 125

Tennessee Kroger, Kroger Marketplace 119 120

Virginia Kroger, Kroger Marketplace, Harris Teeter 116 111

Washington , QFC 117 117

Kentucky Kroger, Kroger Marketplace, Ruler Foods 112 112

Wisconsin Pick 'n Save, Copps, Metro Market 106 107

Illinois Food 4 Less, Kroger, Mariano’s, Ruler Foods 105 106

Kansas Food Stores, Dillons Marketplace 61 62

Oregon Fred Meyer, QFC 56 56

Utah City Market, Smith’s, Smith’s Marketplace 54 56

KROGER FACT BOOK 2018 50 Nevada Smith’s 46 44

West Virginia Kroger 41 42

South Carolina Kroger, Harris Teeter 38 37

Arkansas Kroger, Kroger Marketplace 32 32

Mississippi Kroger 30 30

New Mexico City Market, PriceRite, Smith’s, Smith’s Marketplace 25 25

Maryland Harris Teeter 17 16

Missouri Gerbes Super Markets, Kroger, Ruler Foods 16 17

Idaho Fred Meyer, Smith’s 15 15

Alabama Kroger 11 11

Alaska Fred Meyer 11 11

Nebraska Baker’s 11 11

Louisiana Kroger 9 9

Wyoming City Market, King Soopers, Smith’s 9 9

Montana Smith’s 4 4

Washington, D.C. Harris Teeter 4 4

Delaware Harris Teeter 2 2

Florida Harris Teeter 1 1

TOTAL 2,764 2,782

KROGER FACT BOOK 2018 51 APPENDIX OPERATING DIVISIONS

Kroger’s operating structure is a balance between our corporate office in Cincinnati, Ohio, and our 22 supermarket operating divisions. This balance keeps merchandising decisions closest to the customer while achieving synergies in back office operations to maximize operating efficiencies and minimize operating costs.

In areas that directly affect the customer, Kroger’s decentralized structure places substantial authority for merchandising and operating decisions in our supermarket divisions. Divisional managers are able to respond quickly to changes in competition and customer preferences within each local market.

For administrative processes that offer economies of scale or are invisible to the customer (such as procurement, accounting, treasury, operations, etc.), we leverage Kroger’s size and centralize those functions to create value for customers and better returns for shareholders.

KROGER FACT BOOK 2018 52 KROGER’S 22 SUPERMARKET OPERATING DIVISIONS ARE:

Division Headquarters # Stores

Harris Teeter Charlotte, NC 245

Ralphs , CA 191

Kroger Atlanta Atlanta, GA 183

King Soopers/City Market Denver, CO 152

Roundy’s Milwaukee, WI 150

Smith’s Salt Lake City, UT 142

Kroger Central Indianapolis, IN 139

Fred Meyer Stores Portland, OR 132

Food 4 Less Los Angeles, CA 129

Fry’s Food and Drug Phoenix, AZ 122

Kroger Michigan Novi, MI 121

Kroger Columbus Columbus, OH 118

Kroger Louisville* Louisville, KY 116

Kroger Dallas Dallas, TX 112

Kroger Houston Houston, TX 111

Kroger Mid-Atlantic Roanoke, VA 111

Kroger Cincinnati Cincinnati, OH 108

Kroger Delta Memphis, TN 101

Kroger Nashville Nashville, TN 92

Dillons Food Stores Hutchinson, KS 79

Quality Food Centers (QFC) Seattle, WA 62

Ruler Foods* Seymour, IN 48

TOTAL 2,764

*Jay C stores, formerly with Ruler Foods, are now included in the Louisville division

KROGER FACT BOOK 2018 53 APPENDIX MAJOR MARKETS

At the end of 2018 Kroger operated stores in 50 major markets. A major market is one in which Kroger operates nine or more stores. Kroger holds the #1 or #2 market share position in 44 of those major markets.

Forty-three of Kroger’s 50 major markets are located among the nation’s top

100 Metropolitan Statistical Areas (MSAs) ranked by population.

KROGER FACT BOOK 2018 54 MAJOR MARKETS (9 OR MORE STORES)

# #1 or #2 Market Stores Division Major Competitors LOS ANGELES-LONG BEACH-SANTA ANA, 1 195 Food 4 Less / Ralphs Yes Independent CA

2 ATLANTA-SANDY SPRINGS-MARIETTA, GA 126 Atlanta Yes Supercenter

3 HOUSTON-BAYTOWN-SUGAR LAND, TX 102 Houston Yes HEB Walmart Supercenter

4 PHOENIX-MESA-SCOTTSDALE, AZ 95 Fry’s Food Stores Yes Walmart Supercenter Safeway /

5 SEATTLE-TACOMA-BELLEVUE, WA 87 Fred Meyer / QFC Yes Safeway / Albertsons Walmart Traditional

6 DETROIT-WARREN-LIVONIA, MI 85 Michigan Yes Independent

7 DENVER-AURORA, CO 82 King Soopers Yes Walmart Supercenter Safeway / Albertson

Cincinnati / Ruler 8 CINCINNATI-MIDDLETOWN, OH-KY-IN 73 Yes Walmart Supercenter Meijer Foods

9 CHARLOTTE-CONCORD-GASTONIA, NC-SC 63 Harris Teeter Yes Walmart Supercenter

10 DALLAS-PLANO, TX 61 Dallas Yes Walmart Supercenter Tom Thumb

Food 4 Less / Ruler 11 CHICAGO-NAPERVILLE-JOLIET, IL-IN-WI 61 No Walmart Supercenter Foods / Roundy’s

12 COLUMBUS, OH 60 Columbus Yes Walmart Supercenter

13 INDIANAPOLIS, IN 52 Central Yes Walmart Supercenter Meijer

14 MILWAUKEE-WAUKESHA-WEST ALLIS, WI 51 Roundy’s No Walmart Supercenter Meijer

NASHVILLE-DAVIDSON-MURFREESBORO, 15 48 Nashville Yes Walmart Supercenter Publix TN Louisville / Ruler 16 LOUISVILLE, KY-IN 44 Yes Walmart Supercenter Meijer Foods WASHINGTON-ARLINGTON-ALEXANDRIA, 17 43 Harris Teeter Yes Giant Safeway / Albertsons DC-VA-MD-WV

KROGER FACT BOOK 2018 55 PORTLAND-VANCOUVER-BEAVERTON, 18 42 Fred Meyer / QFC Yes Safeway / Albertsons Winco OR-WA RIVERSIDE-SAN BERNARDINO-ONTARIO, 19 42 Food 4 Less / Ralphs No Stater Bros Walmart Supercenter CA

20 LAS VEGAS-PARADISE, NV 37 Smith’s Yes Walmart Supercenter Safeway / Albertsons

21 MEMPHIS, TN-MS-AR 35 Delta Yes Walmart Supercenter Sav-a-lot

22 DALLAS-FORT WORTH-AR 34 Dallas Yes Walmart Supercenter Safeway / Albertsons

VIRGINIA BEACH-NORFOLK-NEWPORT Mid-Atlantic / Harris 23 33 Yes Walmart Supercenter Food Lion NEWS, VA-NC Teeter

24 SAN DIEGO-CARLSBAD-SAN MARCOS, CA 32 Food 4 Less / Ralphs Yes Vons Walmart Supercenter

Mid-Atlantic / Harris 25 RALEIGH-CARY, NC 30 Yes Walmart Supercenter Food Lion Teeter

26 SALT LAKE CITY, UT 26 Smith’s Yes Walmart Supercenter Harmon's

Walmart Neighborhood 27 WICHITA, KS 24 Dillons Yes Walmart Supercenter Market

28 DAYTON, OH 22 Cincinnati Yes Walmart Supercenter Meijer

29 LITTLE ROCK-NORTH LITTLE ROCK, AR 20 Delta Yes Walmart Supercenter Independent

30 TUCSON, AZ 18 Fry’s Food Stores Yes Walmart Supercenter Safeway / Albertsons

31 RICHMOND, VA 18 Mid-Atlantic Yes Walmart Supercenter Food Lion

32 CHARLESTON-NORTH CHARLESTON, SC 17 Harris Teeter No Walmart Supercenter Publix

33 LEXINGTON-FAYETTE, KY 17 Louisville Yes Walmart Supercenter Meijer

34 TOLEDO, OH 16 Columbus Yes Meijer Walmart Supercenter

35 ALBUQUERQUE, NM 16 Smith’s Yes Walmart Supercenter Safeway / Albertsons

36 KNOXVILLE, TN 15 Nashville Yes Walmart Supercenter Food City

KROGER FACT BOOK 2018 56 37 MADISON, WI 15 Roundy’s No Woodman's Markets Walmart Supercenter

38 ROANOKE, VA 14 Mid-Atlantic Yes Walmart Supercenter Food Lion

39 COLORADO SPRINGS, CO 12 King Soopers Yes Walmart Supercenter Safeway / Albertsons

40 JACKSON, MS 12 Delta Yes Walmart Supercenter Independents

41 FORT WAYNE, IN 12 Central Yes Walmart Supercenter Meijer

42 ST. LOUIS, MO-IL 12 Central / Ruler Foods No Schnuck's Walmart Supercenter

43 OGDEN-CLEARFIELD, UT 11 Smith’s Yes Walmart Supercenter Winco

44 CHARLESTON, WV 11 Mid-Atlantic Yes Walmart Supercenter Food Land

45 GREENSBORO-HIGH POINT, NC 10 Harris Teeter Yes Walmart Supercenter Food Lion

Mid-Atlantic / Harris 46 DURHAM-CHAPEL HILL, NC 10 Yes Food Lion Walmart Supercenter Teeter

47 OMAHA-COUNCIL BLUFFS, NE-IA 10 Dillons Yes Hy Vee Walmart Supercenter

48 OXNARD-THOUSAND OAKS-VENTURA, CA 10 Food 4 Less / Ralphs Yes Vons Trader Joe's

49 PEORIA, IL 9 Central Yes Walmart Supercenter Schnuck's

50 FLINT, MI 9 Michigan Yes Meijer Walmart Supercenter

KROGER FACT BOOK 2018 57 SECONDARY MARKETS (3-8 STORES)

# #1 or #2 Market Stores Division Major Competitors

BOULDER, CO 8 King Soopers Yes Safeway / Albertsons Walmart Supercenter

SAVANNAH, GA 8 Atlanta Yes Walmart Supercenter Publix

WILMINGTON, NC 8 Harris Teeter Yes Walmart Supercenter Food Lion

WINSTON-SALEM, NC 8 Harris Teeter Yes Walmart Supercenter Food Lion

ANCHORAGE, AK 7 Fred Meyer Yes Carrs Walmart Traditional

AUGUSTA-RICHMOND COUNTY, GA-SC 7 Atlanta Yes Walmart Supercenter Publix

PROVO-OREM, UT 7 Smith’s Yes Walmart Supercenter Macey's

ANN ARBOR, MI 7 Michigan Yes Meijer Whole Foods

BOISE CITY-NAMPA, ID 7 Fred Meyer Yes Safeway / Albertsons Walmart Supercenter

FORT COLLINS-LOVELAND, CO 7 King Soopers Yes Walmart Supercenter Safeway / Albertsons

LANSING-EAST LANSING, MI 7 Michigan Yes Meijer Walmart Supercenter

BALTIMORE-COLUMBIA-TOWSON, MD 6 Harris Teeter No Giant Walmart Supercenter

BLOOMINGTON, IN 6 Central / Ruler Foods Yes Walmart Supercenter Independent

Mid-Atlantic / Harris CHARLOTTESVILLE, VA 6 Yes Food Lion Teeter

MACON, GA 6 Atlanta Yes Walmart Supercenter Publix

EVANSVILLE, IN-KY 6 Ruler Foods No Walmart Supercenter Schnuck's

GRAND JUNCTION, CO 6 King Soopers Yes Walmart Supercenter Safeway / Albertsons

GREELEY, CO 6 King Soopers Yes Independent Walmart Supercenter

KROGER FACT BOOK 2018 58 HUNTINGTON-ASHLAND, WV-KY-OH 6 Mid-Atlantic Yes Walmart Supercenter

HUNTSVILLE, AL 6 Nashville No Walmart Supercenter Publix

TOPEKA, KS 6 Dillons Yes Walmart Supercenter Hy Vee

WHEELING, WV-OH 6 Columbus Yes Walmart Supercenter Riesbeck's

SHREVEPORT-BOSSIER CITY, LA 5 Dallas Yes Walmart Supercenter Brookshire's

LYNCHBURG, VA 5 Mid-Atlantic Yes Walmart Supercenter Food Lion

MYRTLE BEACH-CONWAY-NORTH MYRTLE 5 Atlanta / Harris Teeter No Walmart Supercenter Food Lion BEACH, SC

OSHKOSH-NEENAH, WI 5 Roundy’s No Walmart Supercenter

RACINE, WI 5 Roundy’s No Walmart Supercenter

SAN FRANCISCO-OAKLAND-FREMONT, CA 5 Food 4 Less No Safeway / Albertsons Independent

SPRINGFIELD, OH 5 Cincinnati Yes Walmart Supercenter Meijer

WEIRTON-STEUBENVILLE, OH-WV 5 Columbus Yes Walmart Supercenter Riesbeck's

BECKLEY, WV 4 Mid-Atlantic Yes Walmart Supercenter Food Lion

PARKERSBURG-MARIETTA, WV-OH 4 Mid-Atlantic Yes Walmart Supercenter Food Land

ATHENS-CLARKE COUNTY, GA 4 Atlanta Yes Publix Walmart Supercenter

BLACKSBURG-CHRISTIANSBURG-RAD- 4 Mid-Atlantic Yes Walmart Supercenter Food Lion FORD, VA

CARBONDALE, IL 4 Louisville Yes Walmart Supercenter Shnucks

CLARKSVILLE, TN-KY 4 Nashville Yes Walmart Supercenter Publix

COLUMBIA, SC 4 Atlanta No Walmart Supercenter Publix

KROGER FACT BOOK 2018 59 EUGENE-SPRINGFIELD, OR 4 Fred Meyer Yes Walmart Supercenter

GAINESVILLE, GA 4 Atlanta Yes Walmart Supercenter Publix

HILTON HEAD ISLAND-B 4 Atlanta / Harris Teeter Yes Publix Walmart Supercenter

LAFAYETTE, IN 4 Central Yes Walmart Supercenter Meijer

LAWRENCE, KS 4 Dillons Yes Walmart Supercenter Hy Vee

MONROE, MI 4 Columbus / Michigan Yes Meijer Walmart Supercenter

PRESCOTT, AZ 4 Fry’s Food Stores Yes Walmart Supercenter Safeway / Albertsons

SACRAMENTO--ARDEN-ARCADE--ROSE- 4 Food 4 Less No Safeway / Albertsons Walmart Supercenter VILLE, CA SANTA BARBARA-SANTA MARIA-GOLETA, 4 Food 4 Less / Ralphs No Safeway / Albertsons Vons CA

SOUTH BEND-MISHAWAKA, IN-MI 4 Central No Martin's Walmart Supercenter

TERRE HAUTE, IN 4 Central Yes Walmart Supercenter Meijer

WARNER ROBINS, GA 4 Atlanta Yes Walmart Supercenter Publix

SAGINAW-SAGINAW TOWNSHIP NORTH, 3 Michigan Yes Meijer Walmart Supercenter MI

DECATUR, IL 3 Central Yes Walmart Supercenter Aldi

COLUMBUS, IN 3 Central / Louisville Yes Walmart Supercenter Independent

LAKE CHARLES, LA 3 Houston Yes Walmart Supercenter Market Basket

APPLETON, WI 3 Roundy’s No Walmart Supercenter Festival Foods

BAKERSFIELD, CA 3 Food 4 Less No Walmart Supercenter Safeway / Albertsons

BEAUMONT-PORT ARTHUR, TX 3 Houston Yes HEB Market Basket

KROGER FACT BOOK 2018 60 BLOOMINGTON-NORMAL, IL 3 Central No Walmart Supercenter Jewel

BOWLING GREEN, KY 3 Nashville Yes Walmart Supercenter Meijer

COLUMBIA, MO 3 Dillons Yes Walmart Supercenter Hy Vee

ELKHART-GOSHEN, IN 3 Central No Martin's Walmart Supercenter

FRESNO, CA 3 Food 4 Less No Walmart Supercenter Savemart

GREEN BAY, WI 3 Roundy’s No Festival Foods Walmart Supercenter

GREENVILLE, NC 3 Harris Teeter Yes Food Lion Walmart Supercenter

HOT SPRINGS, AR 3 Delta Yes Walmart Supercenter Independent

JACKSON, TN 3 Delta Yes Walmart Supercenter Independent

MANHATTAN, KS 3 Dillons Yes Walmart Supercenter Ft. Riley Commissary

MANSFIELD, OH 3 Columbus Yes Meijer Walmart Supercenter

MUNCIE, IN 3 Central Yes Walmart Supercenter Meijer

MORGANTOWN, WV 3 Mid-Atlantic Yes Walmart Supercenter Giant Eagle

OLYMPIA, WA 3 Fred Meyer / QFC Yes Walmart Supercenter Safeway / Albertsons

OWENSBORO, KY 3 Louisville Yes Walmart Supercenter Meijer

RENO-SPARKS, NV 3 Smith’s No Walmart Supercenter Raley's

SALEM, OR 3 Fred Meyer Yes Winco Walmart Supercenter

SANTA FE, NM 3 Smith’s Yes Safeway / Albertsons Whole Foods

SPOKANE, WA 3 Fred Meyer Yes Walmart Supercenter Rosauers

WAUSAU, WI 3 Roundy’s No Walmart Supercenter Independent

KROGER FACT BOOK 2018 61 KROGER OPERATING DIVISIONS (YEAR-END 2018) Total KROGER DIVISIONS # Stores Square Feet Combo Multi-Dept Marketplace Price Impact Major MSAs (millions) ATLANTA 183 12.0 172 - 11 -

Atlanta 126

Savannah 8

CENTRAL 139 8.1 131 - 8 -

Indianapolis 52

Fort Wayne 12

Peoria 9

CINCINNATI 108 8.2 89 - 19 -

Cincinnati 72

Dayton 22

COLUMBUS 118 8.1 104 - 14 -

Columbus 60

Toledo 16

DALLAS 112 7.8 93 19

Dallas-Plano 62

Dallas-Ft. Worth 34

DELTA 101 5.9 95 - 6 -

Memphis 35

Little Rock 20

Jackson, MS 12

KROGER FACT BOOK 2018 62 Total KROGER DIVISIONS # Stores Square Feet Combo Multi-Dept Marketplace Price Impact Major MSAs (millions)

DILLONS FOOD STORES 79 4.4 74 - 5 -

Wichita 24

Omaha 10

FOOD 4 LESS 129 7.5 - - - 129

Los Angeles 57

Riverside 23

Chicago 14

San Diego 11

FRED MEYER 132 20.8 3 128 1 -

Portland 36

Seattle 35

FRY’S FOOD & DRUG 122 9.4 94 - 28 -

Phoenix 95

Tucson 18

HARRIS TEETER 245 12.1 245 - - -

Charlotte 63

Washington DC 44

Raleigh-Cary 30

Charleston SC 17

Virginia Beach 17

Greensboro-High Point 10

Wilmington 8

KROGER FACT BOOK 2018 63 Total KROGER DIVISIONS # Stores Square Feet Combo Multi-Dept Marketplace Price Impact Major MSAs (millions)

HOUSTON 111 8.0 94 - 17 -

Houston 102

RULER FOODS 48 0.9 - - - 48

St. Louis 10

Evansville 6

KING SOOPERS 152 9.8 141 - 11 -

Denver 82

Colorado Springs 12

LOUISVILLE 116 6.8 105 - 11 -

Louisville 43

Lexington 17

MICHIGAN 121 7.4 116 - 5 -

Detroit 85

Flint 9

MID-ATLANTIC 111 6.4 103 - 8 -

Richmond 18

Roanoke 14

Virginia Beach 16

Charleston, WV 11

Huntington 6

KROGER FACT BOOK 2018 64 Total KROGER DIVISIONS # Stores Square Feet Combo Multi-Dept Marketplace Price Impact Major MSAs (millions)

NASHVILLE 92 6.1 85 - 7 -

Nashville 48

Knoxville 15

QFC 62 2.3 62 - - -

Seattle 52

Portland 5

RALPHS 191 8.5 191 - - -

Los Angeles 138

Riverside 19

San Diego 21

Oxnard 9

ROUNDY’S 150 9.5 150 - - -

Milwaukee 51

Chicago 46

Madison 15

SMITH’S 142 9.3 128 4 10 -

Las Vegas 37

Salt Lake City 26

Albuquerque 16

Ogden 11

TOTAL 2,764 179.3 2,275 132 180 177

KROGER FACT BOOK 2018 65 KROGER FACT BOOK 2018 66