Kroger (KR) 10-K risk factor changes: FY2022 vs FY2021

The operating environment for the food retailing industry continues to be characterized by the fragmentation of local, regional, and national retailers, including both retail and digital formats, [removed: market consolidation,] intense competition and entry of non-traditional competitors.

We see three major trends shaping the [removed: industry post-pandemic:] [added: industry:] e-commerce, cooking at home and prepared foods to go.

We are continuing to enhance the customer connection with investments in our four [removed: competitive moats] [added: strategic pillars] – Seamless, Personalization, Fresh, and _Our Brands_.

Each of these are [removed: strategic differentiators and each one is] [added: strategies] designed to better serve our customers and to generate customer loyalty and sustainable growth momentum.

We believe our plans to continue to improve these four strategic [removed: differentiators] [added: pillars] will enable us to meet the wide-ranging needs and expectations of our customers.

Our digital business [removed: has] accelerated significantly during the COVID-19 [removed: pandemic including Pickup, Delivery and Ship.][added: pandemic.]

The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only locations, or through customer fulfillment centers powered by [removed: Ocado Group plc.][added: Ocado.]

Our technology systems [removed: are vulnerable to disruption] [added: have been, and may be in the future, disrupted] from circumstances beyond our control, [removed: and] [added: as] we regularly defend against and respond to data security incidents.

Cyber-attackers have targeted and accessed, and may in the future again [removed: attempt to] target [removed: and] [added: and, if successful,] access, information stored in our or our vendors’ systems in order to misappropriate confidential customer or business information.

Due to the [removed: political uncertainty involving] [added: ongoing war between] Russia and Ukraine, there is [removed: a] [added: an increased] possibility [removed: that the escalation] of [removed: tensions could result in] cyberattacks that could either directly or indirectly affect our operations.

[removed: We] [added: In addition to the above, we] enter into mergers, acquisitions and strategic alliances with expected benefits including, among other things, operating efficiencies, procurement savings, [removed: innovation,] [added: innovation and] sharing of best [removed: practices and increased share] [added: practices,] that may allow for future growth.

We sell a significant amount of fuel in our [removed: 1,613] [added: 1,637] fuel centers, which could face increased regulation, including due to climate change or other environmental concerns, and demand could be affected by concerns about the effect of emissions on the environment as well as retail price increases.

We are unable to predict future regulations, environmental effects, political unrest, acts of war or terrorism, disruptions to the economy, including but not limited to the COVID-19 pandemic, the [removed: recent invasion of Ukraine by Russia,] [added: war between Russia] and [added: Ukraine, and] other matters that affect the cost and availability of fuel, and how our customers will react to such factors, which could adversely affect our financial condition, results of operations or cash flows.

Our operating results could be materially [removed: impacted] [added: affected] by changes in overall economic conditions and other economic factors that impact consumer confidence and spending, including discretionary spending.

A deterioration in overall economic conditions, [added: including] the [removed: likelihood of which is made more uncertain] [added: uncertainty caused] by [removed: the recent increases in the] inflation [removed: rate,] [added: rate volatility,] could adversely affect our business in many ways, including slowing sales growth, reducing overall sales and reducing gross margins.

If the global economy and financial markets do not perform as we expect, it could adversely affect our [added: business,] financial condition, results of operations or cash flows.

[removed: In addition,] [added: While our operations have generally stabilized since the peak of the pandemic,] we cannot predict with certainty the extent [removed: of the effect] that [added: our operations may continue to be impacted by any continuing effects of] COVID-19 [removed: will have] on [added: us or on] our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely impact us.

Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, equal employment opportunity, minimum [removed: wages,] [added: wages and] licensing for the sale of food, drugs, and alcoholic [removed: beverages, and new provisions relating to the COVID-19 pandemic.][added: beverages.]

Transitioning to alternative energy sources, such as renewable electricity or electric vehicles, [added: and investments in new technologies,] could incur higher costs.

The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, [removed: for example,] [added: such as] the [removed: recent invasion of Ukraine by Russia,] [added: ongoing war between Russia and Ukraine,] quality control issues, a supplier’s financial distress, natural disasters or health crises, including the COVID-19 pandemic, regulatory actions or ethical sourcing issues, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.

OUR PROPOSED TRANSACTION WITH ALBERTSONS CREATES INCREMENTAL BUSINESS, REGULATORY AND REPUTATIONAL RISKS

On October 13, 2022, we entered into a merger agreement with Albertsons Companies Inc. (“Albertsons”), which sets forth the terms of our proposed transaction.

The proposed transaction with Albertsons entails important risks, including, among others: the expected timing and likelihood of completion of the proposed transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory clearance of the proposed transaction; the effect and terms and conditions of any potential divestitures, including those that may be imposed by regulators as a condition to the approval of the proposed transaction, and/or the separation of SpinCo (as described in the merger agreement); the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that have been instituted and may in the future be instituted against the parties and others following announcement of the merger agreement and proposed transaction; the inability to consummate the proposed transaction due to the failure to satisfy other conditions to complete the proposed transaction; risks that the proposed transaction disrupts our current plans and operations; the ability to identify and recognize, including on the expected timeline, the anticipated total shareholder return (“TSR”), revenue and EBITDA expectations; the amount of the costs, fees, expenses and charges related to the proposed transaction; the risk that transaction and/or integration costs are greater than expected, including as a result of conditions regulators put on any approvals of the transaction; the potential effect of the announcement and/or consummation of the proposed transaction on relationships, including with associates, suppliers and competitors; our ability to maintain an investment grade credit rating; the risk that management’s attention is diverted from other matters; risks related to the potential effect of general economic, political and market factors, including changes in the financial markets as a result of inflation or measures implemented to address inflation, and any epidemic, pandemic or disease outbreaks, on Kroger, Albertsons or the proposed transaction; the risk of adverse effects on the market price of our or Albertsons’s securities or on Albertsons’s or the Company’s operating results for any reason; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; and other risks described in our filings with the SEC.

As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputation risk with our customers, suppliers or associates.

We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit and are therefore reliant on banks and other financial institutions to safeguard and allow ready access to these assets.

If banks or financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened.

COVID-19 has impacted and may continue to impact our business, including our supply chain, store operations and merchandising functions, as well as our associates.

The global COVID-19 pandemic continues to affect our business.

Two full years into the pandemic, many factors and uncertainties remain, including:

| | ● | the continuing concerns about the health of, and the effect on our associates, and our ability to meet staffing needs in our stores, distribution facilities, corporate offices and other critical functions; |

| --- | --- | --- |

| | ● | the ultimate duration of the pandemic, including whether there will be additional spikes in the number of COVID-19 cases, future variants, mutations or related strains of the virus; |

| | ● | the duration, degree and effectiveness of governmental measures, such as access to unemployment compensation, stimulus payments, and other fiscal policy changes; |

| | ● | the timing and availability of, and prevalence of access to and utilization of, effective medical treatments for COVID-19; |

| | ● | the effectiveness of vaccines against variants and efficacy of vaccines over time, vaccine availability for young children, global vaccine access, and the percentage of fully vaccinated individuals in the US and the corresponding effect on the duration of the pandemic; |

| | ● | whether and when the global pandemic will become endemic; |

| | ● | evolving macroeconomic factors, including general economic uncertainty, unemployment rates, and recessionary pressures; |

| | ● | the impact of the pandemic on economic activity and the pace and extent of recovery when the pandemic subsides or becomes endemic, which may vary materially over time and among the different regions and markets we serve; |

| | ● | the extent and duration of the effect on consumer confidence, economic well-being, spending, customer demand, buying patterns and shopping behaviors, including spend on discretionary categories, which often include higher margin products, and increased utilization of online sales channels, both during and after the pandemic; and |

| | ● | the long-term impact of the pandemic on our business, including consumer behaviors. |

MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended January [removed: 30, 2021,] [added: 29, 2022,] which provides additional information on comparisons of fiscal years [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

[removed: Our execution of this] [added: Kroger’s proven value creation] model is allowing us to deliver today and invest for the future.

The foundation of our value creation model is our [removed: market leading] omnichannel [removed: position in] food [removed: retail,] [added: retail business,] which is built on Kroger’s [removed: unique] [added: strategic] assets: our stores, digital ecosystem, _Our Brands_ and our data.

These [removed: unique] assets, when combined with our go-to-market strategy, deliver [removed: an unmatched] [added: a compelling] value proposition for our customers.

We continue to [removed: invest in areas of the business that matter most to our customers and deepen our competitive moats of] [added: build long-term customer loyalty through] Fresh, _Our Brands_, [removed: Data &] Personalization and [removed: Seamless,] [added: our seamless shopping experience] to drive sustainable sales growth in our retail supermarket business, including fuel and health [removed: &] [added: and] wellness.

This, in turn, generates the data and traffic that enables our [removed: fast-growing,] [added: fast growing,] high operating margin alternative [removed: profits.][added: profit businesses.]

| | ● | Growing identical sales without fuel. [removed: A key component of our growth plan is to double digital sales and our digital profitability rate by 2023.] Our plan [removed: also] involves maximizing growth [removed: levers] [added: opportunities] in our supermarket business and is supported by continued strategic investments in our customers, associates, and our [removed: Seamless eco-system] [added: seamless ecosystem] to ensure we deliver a full, friendly and fresh experience for every customer, every [added: time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate – a faster pace than other food at home sales – over] time; and |

| | ● | Expanding operating margin, through a balanced model where strategic price investments for our [removed: customers and] [added: customers,] investments in our [removed: associates] [added: associates’ wages] and [removed: seamless ecosystem] [added: benefits and investments in technology to deliver a better associate and customer experience] are offset by [added: (i)] our cost savings program, which has delivered $1 billion in cost savings annually for the past [removed: four] [added: five fiscal] years, [added: (ii) improving our product mix, as we accelerate momentum with our Fresh] and [removed: sustained growth in] [added: _Our Brands_ initiatives, and (iii) growing] our alternative profit [removed: streams.] [added: businesses.] |

Our first priority is to invest in the business through attractive high return [removed: organic and inorganic] opportunities that drive long-term sustainable net earnings growth.

We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock [removed: repurchases.][added: repurchases, subject to Board approval.]

We expect our value creation model will result in total shareholder return [removed: over the long-term] within our target range of 8% to [removed: 11%.][added: 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.]

[removed: 2021] [added: 2022] EXECUTIVE SUMMARY

[removed: We invested more than ever before in our associates to raise our average hourly wage to $17 and our] [added: Our] average hourly rate [removed: to over $22 with] [added: is now more than $18 and more than $23, when] comprehensive benefits [added: are] included.

| [removed: ​] [added: ​] | [removed: ​] [added: ​] | [added: 2022 | | ​ | Change(1) | ​ |] 2021 | | ​ | [removed: Change] [added: Change(2)] | ​ | 2020 | | ​ |

| [removed: Sales] [added: Total sales] | ​ | $ | [added: 148,258 | ​ | 7.5 | % | $ |] 137,888 | ​ | 4.1 | % | $ | 132,498 | ​ |

| Sales without fuel | ​ | $ | [removed: 123,210] [added: 129,626] | ​ | [removed: 0.2] [added: 5.2] | % | $ | [removed: 123,012] [added: 123,210] | ​ |

| Net earnings attributable to The Kroger Co. | ​ | $ | [removed: 1,655] [added: 2,244] | ​ | [removed: (36.0)] [added: $] | [removed: %] [added: 1,655] | [added: ​ |] $ | 2,585 | ​ |

| [removed: Adjusted net] [added: Net] earnings attributable to The Kroger Co. [added: excluding the Adjusted Items] | ​ | $ | [removed: 2,802] [added: 3,104] | ​ | [removed: 2.3] [added: $] | [removed: %] [added: 2,802] | [added: ​ |] $ | 2,740 | ​ |

| Net earnings attributable to The Kroger Co. per diluted common share | ​ | $ | [removed: 2.17] [added: 3.06] | ​ | [removed: (33.6)] [added: $] | [removed: %] [added: 2.17] | [added: ​ |] $ | 3.27 | ​ |

| [removed: Adjusted net] [added: Net] earnings attributable to The Kroger Co. per diluted common share [added: excluding the Adjusted Items] | ​ | $ | [removed: 3.68] [added: 4.23] | ​ | [removed: 6.1] [added: $] | [removed: %] [added: 3.68] | [added: ​ |] $ | 3.47 | ​ |

| Operating profit | ​ | $ | [removed: 3,477] [added: 4,126] | ​ | [removed: 25.1 | % |] $ | [removed: 2,780] [added: 3,477] | ​ |

| Adjusted FIFO operating profit | ​ | $ | [removed: 4,310] [added: 5,079] | ​ | [removed: 6.3] [added: 17.8] | % | $ | [removed: 4,056] [added: 4,310] | ​ |

| Dividends paid | ​ | $ | [removed: 589] [added: 682] | ​ | [removed: 10.3] [added: 15.8] | % | $ | [removed: 534] [added: 589] | ​ |

| Dividends paid per common share | ​ | $ | [removed: 0.78] [added: 0.94] | ​ | [removed: 14.7] [added: 20.5] | % | $ | [removed: 0.68] [added: 0.78] | ​ |

| Identical sales excluding fuel | ​ | ​ | [removed: 0.2] [added: 5.6] | % | N/A | ​ | ​ | [removed: 14.1] [added: 0.2] | % |

| FIFO gross margin rate, excluding fuel, bps [removed: increase (decrease)] [added: decrease] | ​ | ​ | [removed: (0.43)] [added: (0.09)] | ​ | N/A | ​ | ​ | [removed: 0.14] [added: (0.43)] | ​ |

| OG&A rate, excluding fuel and Adjusted Items, bps decrease | ​ | ​ | [removed: 0.61] [added: 0.19] | ​ | N/A | ​ | ​ | [removed: 0.06] [added: 0.61] | ​ |

| [removed: Reduction] [added: Increase (decrease)] in total debt, including obligations under finance leases compared to prior fiscal year end | ​ | $ | [removed: 49] [added: 14] | ​ | N/A | ​ | $ | [removed: 663] [added: (49)] | ​ |

| Share repurchases | ​ | $ | [removed: 1,647] [added: 993] | ​ | N/A | ​ | $ | [removed: 1,324] [added: 1,647] | ​ |

Notable items for [removed: 2021] [added: 2022] are:

| [removed: | ● |] Net earnings attributable to The Kroger Co. per diluted common share [removed: of $2.17, which results in a two-year compounded annual growth rate of 3.1%.] | [added: ​ | $ | 3.06 | ​ | 41.0 | % | $ | 2.17 | ​ |]

| [removed: | ● |] Adjusted net earnings attributable to The Kroger Co. per diluted common share [removed: of $3.68, which results in a two-year compounded annual growth rate of 29.6%.] | [added: ​ | $ | 4.23 | ​ | 14.9 | % | $ | 3.68 | ​ |]

| | ● | Generated cash flows from operations of [removed: $6.2] [added: $4.5] billion. |

| | ● | Achieved cost savings greater than $1 billion for the [removed: fourth] [added: fifth] consecutive year. |

| | ● | We are currently operating in a more volatile inflationary environment and we experienced higher product cost inflation [removed: in most departments] during [added: 2022, compared to] 2021. Our LIFO charge for [removed: 2021] [added: 2022] was [removed: $197] [added: $626] million, compared to [removed: a credit of $7] [added: $197] million in [removed: 2020.] [added: 2021.] This increase [removed: of $204 million] was attributable to higher [added: product cost] inflation [added: primarily] in [removed: most categories, with grocery and meat being the largest contributors.] [added: grocery.] |

For additional information about our debt activity in [removed: 2021 and 2020, including the drawdown and repayments under our revolving credit facility, forward-starting interest rate swap agreements and our senior note issuances,] [added: 2022,] see Note 5 to the Consolidated Financial Statements.

Our [removed: retail business] [added: Company] is built on the foundation of our [removed: market leading position in] food retail [added: business,] which includes the added convenience of our retail pharmacies and fuel centers.

We also [removed: leverage] [added: utilize] the data and traffic generated by our retail business to deliver incremental value and services for our customers that generates alternative profit streams.

Our [removed: unique] combination of assets include the following:

As of January [removed: 29, 2022,] [added: 28, 2023,] Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia.

Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty.

This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.

During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.

We achieved exceptional results in 2022 as we executed on our _Leading with Fresh and Accelerating with Digital_ strategy, building on record years in 2020 and 2021.

These results were driven by positive identical sales without fuel of 5.6%, disciplined margin management and strong fuel profitability.

Our proven go-to-market strategy enables us to successfully navigate many operating environments, which has allowed us to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets.

Our value proposition, which includes providing great quality, fresh products at affordable prices, data-driven promotions, trusted _Our Brands_ products and our fuel rewards program, is resonating with shoppers and driving total household growth and enhanced customer loyalty.

During the year, we continued to invest in wages and the associate experience and in creating zero hunger, zero waste communities, as we believe these components of our strategy are critical to achieving long term sustainable growth.

In 2022, our average hourly rates increased by more than 6% and we have now invested an incremental $1.9 billion in associate wages since 2018.

In 2023, we expect to build on this momentum and deliver revenue and adjusted net earnings per diluted share growth on top of the record results achieved over the past three years.

We expect to grow revenue by continuing to invest in our customers through competitive pricing and personalization, fresh products and a better shopping experience.

Building on our significant investments over the past four years, we will also continue to increase associate wages.

We will fund these investments through product mix improvements, cost saving initiatives and growth in our alternative profit businesses.

Looking forward, we believe we are well positioned to successfully operate in an evolving economic environment and continue to deliver attractive and sustainable total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.

| Sales | ​ | $ | 148,258 | ​ | 7.5 | % | $ | 137,888 | ​ |

| | ● | Achieved operating profit of $4.1 billion, which represents a 19% increase compared to 2021. |

| | ● | Achieved adjusted FIFO operating profit of $5.1 billion, which represents an 18% increase compared to 2021. |

| | ● | Returned $1.7 billion to shareholders through share repurchases and dividend payments. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. |

| | ● | Identical sales, excluding fuel, increased 5.6%, which included identical sales growth in _Our Brands_ categories of 9.0%. Identical sales, excluding fuel, would have grown 5.8% in 2022 if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability. |

| | ● | Digital sales increased 4%, which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. |

| | ● | As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons. In connection with the merger agreement, we entered into a commitment letter for a bridge term loan facility and executed a term loan credit agreement. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements. |

| | ● | During 2022, we opened four additional Kroger Delivery customer fulfillment centers powered by Ocado’s automated smart platform — one in Dallas, Texas, one in Pleasant Prairie, Wisconsin, one in Romulus, Michigan and one in Aurora, Colorado. |

| | ● | During 2022, we recognized legal settlement costs of $85 million, $67 million net of tax, relating to the settlement of all opioid litigation claims with the State of New Mexico. This amount was excluded from our adjusted FIFO operating profit and adjusted net earnings results to reflect the unique and non-recurring nature of the charge. This settlement is not an admission of wrongdoing or liability by Kroger and we will continue to vigorously defend against other claims and lawsuits relating to opioids. This settlement is based on a set of unique and specific facts relating to New Mexico, and we do not believe that the settlement amount or any other terms of our agreement with New Mexico can or should be extrapolated to any other opioid-related cases pending against us. It is our view that this settlement is not a reliable proxy for the outcome of any other cases or the overall level of our exposure. |

| | ● | During 2022, we recorded a goodwill and fixed asset impairment charge related to Vitacost.com for $164 million. The talent and capabilities gained through the merger with Vitacost in 2014 have been key to advancing Kroger’s digital platform and growing our digital business to more than $10 billion in annual sales. As our digital strategy has evolved, our primary focus looking forward will be to effectively utilize our Pickup and Delivery capabilities and this reprioritization resulted in the impairment charge. Vitacost.com will continue to operate as an online platform providing great value natural, organic, and eco-friendly products for customers. |

Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, _Our Brands_, Data & Personalization and Seamless.

Our Delivery solutions include orders delivered to customers from retail store locations and customer fulfillment centers powered by Ocado.

These channels allow us to serve customers anything, anytime, and anywhere with zero compromise on selection, convenience, and price.

_Proposed Merger with Albertsons_

As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons.

The proposed merger is expected to accelerate our go-to-market strategy that includes Fresh, _Our Brands_, Personalization and Seamless, and continue our track record of investments across lowering prices, enhancing the customer experience, and increasing associate wages and benefits.

| | ● | Charges to operating, general and administrative expenses (“OG&A”) of $25 million, $19 million net of tax, for obligations related to withdrawal liabilities for certain multi-employer pension funds, $20 million, $15 million net of tax, for the revaluation of Home Chef contingent consideration, $44 million, $34 million net of tax, for merger related costs, $85 million, $67 million net of tax, for legal settlement costs and $164 million for goodwill and fixed asset impairment charges related to Vitacost.com (the “2022 OG&A Adjusted Items”). |

| | ● | Losses in other income (expense) of $728 million, $561 million net of tax, for the unrealized loss on investments (the “2022 Other Income (Expense) Adjusted Items”). |

| Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(1)(9) | ​ | ​ | 164 | ​ | ​ | — | ​ | ​ | — | ​ |

| Adjustment for merger related costs(10) | ​ | ​ | 0.05 | ​ | ​ | — | ​ | ​ | — | ​ |

| Adjustment for legal settlement costs(10) | ​ | ​ | 0.09 | ​ | ​ | — | ​ | ​ | — | ​ |

| Adjustment for goodwill and fixed asset impairment charges related to Vitacost.com(10) | ​ | ​ | 0.22 | ​ | ​ | — | ​ | ​ | — | ​ |

| (7) | The pre-tax adjustment for merger related costs was $44. Merger related costs primarily include third-party professional fees and credit facility fees associated with the proposed merger with Albertsons. |

| (9) | The pre-tax and after-tax adjustments for goodwill and fixed asset impairment charges related to Vitacost.com was $164. |

Total sales, excluding fuel, increased 5.2% in 2022, compared to 2021, which was primarily due to our identical sales increase, excluding fuel, of 5.6%, partially offset by discontinued patient therapies at Kroger Specialty Pharmacy.

Identical sales, excluding fuel, for 2022, compared to 2021, increased primarily due to an increase in the number of households shopping with us and an increase in basket value due to retail inflation, partially offset by a reduction in the number of items in basket and the termination of our agreement with Express Scripts.

| --- | --- |

Significant fluctuations occurred in our business during 2020 due to the COVID-19 pandemic.

As a result, management compares current year identical sales without fuel, adjusted FIFO operating profit and adjusted net earnings per diluted share results to the same metrics for the comparable period in 2019, in addition to comparisons made to 2020.

This enables management to evaluate results of the business and our financial model over a longer period of time, and to better understand the state of the business after the height of the pandemic compared to the period of time prior to the pandemic.

Kroger has developed multiple levers within our business model to ensure we deliver net earnings growth and consistent and attractive total shareholder return (“TSR”).

Our strategic priorities of leading with fresh and accelerating with digital propelled Kroger to record performance in 2021, on top of record results in 2020.

These results demonstrate the strength of our go-to-market strategy, which led to achieving positive identical sales without fuel against very strong identical sales without fuel last year, resulting in a two-year stacked growth rate of 14.3%.

Digital sales two-year stacked growth was 113% for 2021 and has grown triple digits since the beginning of 2019.

We connected with customers through our expanding seamless ecosystem and the consistent delivery of a full, fresh, and friendly customer experience.

We balanced these investments by achieving cost savings greater than $1 billion for the fourth consecutive year and alternative profits contributed an incremental $150 million of operating profit.

Our agility and the commitment from our associates is allowing us to navigate a more volatile inflationary environment, current labor and supply chain conditions, and provide fresh food at affordable prices across our seamless ecosystem.

The following graphic illustrates our go-to-market strategy:

![A picture containing diagram

Description automatically generated](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129x10k004.jpg)

As we look to 2022, we expect the momentum in our business to continue and have confidence in our ability to navigate a rapidly changing operating environment.

Our 2022 guidance reaffirms that we are creating a new, higher base from which we expect to grow.

Our adjusted FIFO operating profit guidance for 2022 is $900 million higher than our TSR model would have projected when we announced it in 2019.

Our guidance also highlights the flexibility and multiple levers that exist within our model today, which will allow us to deliver adjusted net earnings per diluted share growth in 2022, while cycling COVID-19 effects and investing for future growth.

We are leveraging technology, innovation, and our competitive moats to build lasting competitive advantages.

Our balanced model is allowing us to deliver for shareholders, invest in our associates, continue to provide fresh affordable food to our customers and uplift our communities.

We remain confident in our value creation model and we expect to deliver total shareholder return over the long-term within our target range of 8% to 11%.

($ in millions, except per share amounts)

| | ● | Achieved operating profit of $3.5 billion, which results in a two-year compounded annual growth rate of 24.3%. |

| | ● | Achieved adjusted FIFO operating profit of $ 4.3 billion, which results in a two-year compounded annual growth rate of 20.0%. |

| | ● | Returned $2.2 billion to shareholders through share repurchases and dividend payments. |

| | ● | Identical sales, excluding fuel, increased 0.2%, which results in a two-year stacked growth rate of 14.3%. |

| | ● | Digital sales two-year stacked growth was 113%. Digital sales include products ordered online and picked up at our stores and products delivered or shipped directly to a customer’s home. |

| | ● | Our Home Chef business surpassed $1 billion in sales in 2021, becoming the newest _Our Brands_ billion dollar brand in our portfolio. |

| | ● | Alternative profit streams contributed an incremental $150 million of operating profit for 2021 fueled by our digital media business – Kroger Precision Marketing (“KPM”) and Kroger Personal Finance. |

| | ● | During 2021, we settled certain company-sponsored pension plan obligations using existing assets of the plans. We recognized a non-cash settlement charge of $87 million, $68 million net of tax, associated with the settlement of our obligations for the eligible participants’ pension balances that were distributed out of the plans via a lump sum distribution or the purchase of an annuity contract, based on each participant’s election. The settlement charge is included in “Non-service component of company-sponsored pension plan costs” in the Consolidated Statements of Operations. The effect of this transaction on net earnings per diluted share was $0.09 for 2021 and is excluded from adjusted net earnings per diluted share results. |

| | ● | During 2021, Fred Meyer and QFC and four local unions ratified an agreement for the transfer of liabilities from the Sound Retirement Trust to the United Food and Commercial Workers (“UFCW”) Consolidated Pension Plan. The agreement transferred $449 million, $344 million net of tax, in net accrued pension liabilities and prepaid escrow funds, to fulfill obligations for past service for associates and retirees. The agreement will be satisfied by cash installment payments to the UFCW Consolidated Pension Plan and are expected to be paid evenly over seven years. The impact of this transaction on net earnings per diluted share was $0.45 for 2021 and is excluded from adjusted net earnings per diluted share results. |

| | ● | During 2021, we opened our first three Kroger Delivery customer fulfillment centers powered by Ocado Group plc in Monroe, Ohio, Groveland, Florida, a new Kroger geography, and Forest Park, Georgia. |

_COVID-19_

The COVID-19 pandemic has had, and is continuing to have, a significant impact on our business and results of operations.

We expect the ultimate significance will be dictated by the length of time that such circumstances continue, which will depend on the currently unknowable extent and duration of the COVID-19 pandemic and any governmental and public actions taken in response.

Since the beginning of the pandemic, our most urgent priority has been to safeguard our associates and customers.

We’ve implemented dozens of new safety and cleanliness processes and procedures in our stores and other facilities.

As the pandemic has evolved, we have experienced unusually strong sales beginning in 2020 and continuing throughout 2021.

We continue to see people eat and work more from home and prioritize health and cleanliness.

The change in customer behavior caused by COVID-19 was a major factor in our results over the past two years.

We had no forward-starting interest rate swap agreements outstanding as of January 29, [removed: 2022 or January 30, 2021.][added: 2022.]

Annually, we review with the [removed: Financial Policy] [added: Finance] Committee of our Board of Directors compliance with the guidelines described above.

The tables below provide information about our underlying debt portfolio as of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021.][added: 29, 2022.]

The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021.][added: 29, 2022.]

The variable rate debt is based on a reference rate using the forward yield curve as of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021.][added: 29, 2022.]

The Fair Value column includes the fair value of our debt instruments as of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021.][added: 29, 2022.]

We had no outstanding interest rate derivatives classified as fair value hedges as of January [removed: 29, 2022] [added: 28, 2023] or January [removed: 30, 2021.][added: 29, 2022.]

| ​ | | [removed: 2021] [added: 2023] | | | [removed: 2022] [added: 2024] | | | [removed: 2023] [added: 2025] | | | [removed: 2024] [added: 2026] | | | [removed: 2025] [added: 2027] | | | Thereafter | | | Total | | | Fair Value | | |

| Variable rate | ​ | $ | [removed: (42)] [added: (35)] | ​ | $ | [removed: —] [added: (22)] | ​ | $ | [removed: (23)] [added: (81)] | ​ | $ | — | ​ | $ | [removed: (81)] [added: —] | ​ | $ | — | ​ | $ | [removed: (146)] [added: (138)] | ​ | $ | [removed: (146)] [added: (138)] | ​ |

Based on our year-end [removed: 2021] [added: 2022] variable rate debt levels, a 10 percent change in interest rates would be immaterial.

As of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021,] [added: 29, 2022,] we had no commodity derivative contracts outstanding.

Fair value adjustments flow through “(Loss) gain on investments” in [removed: the Company’s] [added: our] Consolidated Statements of Operations.

The change in fair value of this investment resulted in an unrealized (loss) gain on investments of [added: ($586) million in 2022,] ($821) million in [removed: 2021,] [added: 2021 and] $1.0 billion in [removed: 2020 and $157 million in 2019.][added: 2020.]

As of January [removed: 29, 2022,] [added: 28, 2023,] the value of our investment in Ocado was [removed: $987] [added: $401] million.

As of January [removed: 29, 2022,] [added: 28, 2023,] a 10% change in the fair value of this investment would be approximately [removed: $100] [added: $40] million.

As of January [removed: 29, 2022,] [added: 28, 2023,] our defined benefit pension plans had total investment assets of [removed: $3.1] [added: $2.5] billion.

As of January 28, 2023, we maintained five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5.4 billion.

A forward-starting interest rate swap is an agreement that effectively hedges the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt.

We entered into these forward-starting interest rate swaps in order to lock in fixed interest rates on our forecasted issuances of debt.

The fixed interest rates for these forward-starting interest rate swaps range from 3.00% to 3.78%.

The variable rate component on the forward-starting interest rate swaps is the Secured Overnight Financing Rate (SOFR).

A notional amount of $2.4 billion of these forward-starting interest rate swaps was designated as a cash-flow hedge as defined by GAAP.

Accordingly, the changes in fair value of these forward-starting interest rate swaps are recorded to other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings.

As of January 28, 2023, the fair value of the interest rate swaps designated as cash flow hedges was recorded in “Other long-term liabilities” for $116 million and accumulated other comprehensive loss for $89 million, net of tax.

The remainder of the notional amount of $3.0 billion of the forward-starting interest rate swaps was not designated as a cash-flow hedge.

Accordingly, the changes in the fair value of these forward-starting interest rate swaps not designated as cash-flow hedges are recognized through net earnings.

As of January 28, 2023, the fair value of these swaps was recorded in “Other long-term liabilities” for $142 million.

During 2022, we recognized an unrealized loss of $142 million that is included in “(Loss) gain on investments” in our Consolidated Statements of Operations.

| ​ | ​ | January 28, 2023 | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | ​ | $ | (1,118) | ​ | $ | (3) | ​ | $ | (3) | ​ | $ | (1,386) | ​ | $ | (607) | ​ | $ | (8,037) | ​ | $ | (11,154) | ​ | $ | (10,455) | ​ |

| Average interest rate | ​ | | 4.52 | % | | 1.53 | % | | 3.64 | % | | 4.26 | % | | 4.68 | % | | 4.54 | % | ​ | ​ | ​ | ​ | ​ | ​ |

| Average interest rate | ​ | | 6.32 | % | | 7.07 | % | | 1.70 | % | | — | ​ | | — | ​ | | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | January 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | ​ | $ | (802) | ​ | $ | (894) | ​ | $ | (1,093) | ​ | $ | — | ​ | $ | — | ​ | $ | (9,475) | ​ | $ | (12,264) | ​ | $ | (14,534) | ​ |

| Average interest rate | ​ | | 4.20 | % | | 4.29 | % | | 4.53 | % | | — | ​ | | — | ​ | | 4.36 | % | ​ | ​ | ​ | ​ | ​ | ​ |

| Average interest rate | ​ | | 1.87 | % | | — | ​ | | 2.62 | % | | — | ​ | | 0.08 | % | | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

Our [removed: retail business] [added: Company] is built on the foundation of our [removed: market leading position in] food retail [added: business,] which includes the added convenience of our retail pharmacies and fuel centers.

We also [removed: leverage] [added: utilize] the data and traffic generated by our retail business to deliver incremental value and services for our customers that generates alternative profit streams.

Our [removed: unique] combination of assets include the following:

As of January [removed: 29, 2022,] [added: 28, 2023,] Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia.

As of January [removed: 29, 2022,] [added: 28, 2023,] Kroger operated, either directly or through its subsidiaries, [removed: 2,726] [added: 2,719] supermarkets, of which 2,252 had pharmacies and [removed: 1,613] [added: 1,637] had fuel centers.

Quality meat, dairy, baked goods and fresh produce items provide [removed: a competitive advantage.][added: strategic differentiation for price impact warehouse stores.]

We offer Pickup [removed: (also referred to as ClickList®)] and Harris Teeter ExpressLane™ — personalized, order online, pick up at the store services — at [removed: 2,257] [added: 2,274] of our supermarkets and provide [removed: home delivery services,] [added: Delivery,] which allows us to offer digital solutions to [removed: 98%] [added: substantially all] of our customers.

We [added: also] provide relevant customer-facing apps and interfaces that have the features customers want that are also reliable, easy to use and deliver a seamless customer experience across our store and digital channels.

_Our Brands_ products play an important role in our merchandising strategy and represented [removed: nearly $28] [added: over $30] billion of our sales in [removed: 2021.][added: 2022.]

Our supermarkets, on average, stock over [removed: 14,000] [added: 13,500] private label items.

Big K®, [removed: Check This Out…®] [added: Smart Way®] and Heritage Farm® are some of our value brands, designed to deliver good quality at a very affordable price.

Both Simple Truth and Simple Truth Organic are free from a defined list of artificial ingredients that [added: some] customers have told us they do not want in their food, and the Simple Truth Organic products are USDA certified organic.

Approximately [removed: 29%] [added: 30%] of _Our Brands_ units and [removed: 41%] [added: 42%] of the grocery category _Our Brands_ units sold in our supermarkets are produced in our food production plants; the remaining _Our Brands_ items are produced to our strict specifications by outside manufacturers.

As of January [removed: 29, 2022,] [added: 28, 2023,] we operated 33 food production plants.

Kroger serves [removed: over] [added: approximately] 60 million households annually and because of our [removed: market leading] rewards program, [removed: 96%] [added: over 90%] of customer transactions are tethered to a Kroger loyalty card.

Our 20 years of investment in data science capabilities is allowing us to [removed: leverage] [added: utilize] this data to create personalized experiences and value for our customers and is also enabling our fast-growing, high operating margin alternative [removed: profits,] [added: profit businesses,] including data analytic services and third party media revenue.

Our retail media business – Kroger Precision Marketing – provides [removed: best in class] [added: differentiated] media capabilities for our consumer packaged goods partners and is a key driver of our digital profitability and alternative profit.

All references to [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] are to the fiscal years ended January [added: 28, 2023, January] 29, [removed: 2022,] [added: 2022 and] January 30, [removed: 2021 and February 1, 2020,] [added: 2021,] respectively, unless specifically indicated otherwise.

We maintain a web site (www.thekrogerco.com) that includes the [removed: _Kroger] [added: Kroger] Fact [removed: Book_] [added: Book] and other additional information about the Company.

This is why we [added: aim to] create working environments where associates feel encouraged and supported to be their best selves every day.

As of January [removed: 29, 2022,] [added: 28, 2023,] Kroger employed [removed: over 420,000] [added: nearly 430,000] full- and part-time employees.

Many supermarket roles offer opportunities to learn new skills, grow and advance [removed: careers — inside or outside our family of companies.][added: careers.]

In [removed: 2022,] [added: 2023,] we expect to spend approximately [removed: $145] [added: $175] million on training our associates through onboarding, leadership development programs, and programs designed to upskill associates across the Company.

[removed: More than 3,000] [added: Approximately 5,000] associates, 90% of whom are hourly, have taken advantage of our tuition reimbursement program in [removed: 2021.][added: 2022.]

Kroger has invested more than [removed: $40] [added: $50] million in this program since it launched in 2018.

We are investing in our associates by expanding our industry-leading benefits, including continuing [removed: education and tuition reimbursement,] [added: education,] training and development, [removed: health,] [added: health] and wellness.

[removed: Beyond the pandemic, we] [added: We] prioritize providing the right safety training and equipment, safe working conditions and resources to maintain and improve associates’ well-being.

There are approximately [removed: 310] [added: 320] such agreements, usually with terms of three to five years.

We continue to explore opportunities and take steps to reduce the [removed: impacts] [added: effects] of our operations on the environment and to reduce the potential risk of a changing climate on our operations.

This includes [added: enhancing our operational efficiency,] increasing our usage of renewable [removed: energy, investments] [added: energy and investing] in new [removed: technologies and enhancing our operational efficiency.][added: technologies.]

The key elements of our [removed: ESG] [added: climate] strategy are included below.

Climate [removed: impacts] [added: effects] are managed by leadership with input from several departments across the business.

The Public Responsibilities Committee of the Board of Directors oversees our responsibilities as a corporate citizen and the Company’s practices related to environmental sustainability, including climate [removed: impacts,] [added: effects,] along with other environmental and social topics of material importance.

Kroger discloses detailed energy and emissions data, as well as our approach to managing [removed: climate effects,] [added: climate-related topics,] in our annual ESG Report, which can be found [removed: on our sustainability web site] at www.thekrogerco.com/esgreport.

To help identify and manage climate-related risks to our business, we [removed: conducted] [added: conduct] both qualitative and quantitative risk [removed: assessments that have assessed the effect and vulnerability of climate risk on our operations.][added: assessments.]

As a result of forthcoming state and federal requirements regarding the phase down of hydrofluorocarbon [removed: (HFC)] [added: (“HFC”)] refrigerants, we anticipate steadily replacing our refrigerant infrastructure to reach required levels, which could incur significant costs to the business.

[removed: This] [added: Any such] legislation will affect all retailers using refrigerants in their operations.

In 2020, we set a [removed: new] goal to reduce absolute greenhouse gas [added: (“GHG”)] emissions from our operations (scope 1 and 2 emissions) by 30% by 2030, against a 2018 baseline.

Additional discussion about our approach to managing climate effects is included in [removed: Kroger’s] [added: our] annual ESG [removed: report.][added: Report.]

| Mary E. Adcock | ​ | [removed: 46] [added: 47] | ​ | Ms. Adcock was elected Senior Vice President effective May 1, 2019 and is responsible for retail operations as well as the oversight of all Kroger retail divisions. From June 2016 to April 2019, she served as Group Vice President of Retail Operations. Prior to that, Ms. Adcock held leadership roles in Kroger’s Columbus Division, including Vice President of Operations and Vice President of Merchandising. Prior to that, Ms. Adcock served as Vice President of Natural Foods Merchandising and as Vice President of Deli/Bakery Manufacturing and held several leadership positions in the manufacturing department, including human resources manager, general manager and division operations manager. Ms. Adcock joined Kroger in 1999 as human resources assistant manager at the Country Oven Bakery in Bowling Green, Kentucky. |

Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in four strategic pillars: Fresh, _Our Brands_, Data & Personalization and Seamless.

Our Delivery solutions include orders delivered to customers from retail store locations and customer fulfillment centers powered by Ocado.

These channels allow us to serve customers anything, anytime, and anywhere with zero compromise on selection, convenience, and price.

_Proposed Merger with Albertsons_

As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons.

The proposed merger is expected to accelerate our go-to-market strategy that includes Fresh, _Our Brands_, Personalization and Seamless, and continue our track record of investments across lowering prices, enhancing the customer experience, and increasing associate wages and benefits.

For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements.

During 2022, we raised our average hourly rates by more than 6% and have now invested an incremental $1.9 billion in associate wages since 2018.

Our average hourly rate is now more than $18 and more than $23, when comprehensive benefits are included.

We are committed to sustainably increasing associate wages and plan to invest more than $770 million in associates in 2023.

We conducted our first quantitative climate risk assessment to determine the likelihood that different physical climate risks, including drought, extreme heat and extreme precipitation, would affect Kroger’s operations at representative facilities in different geographies and, in turn, potentially increase operating costs for these facilities.

Kroger is in the process of resetting its GHG reduction target to align with the requirements of the Science Based Targets initiative.

This includes resetting our current Scope 1 and 2 emissions goal to support the 1.5°C scenario, and setting new Scope 3 emissions goals.

We are one of the world’s largest retailers, as measured by revenue.

Our market leading position in food retail reflects the strength of our competitive moats of Fresh, _Our Brands_, Data & Personalization and Seamless, and our unique combination of assets.

They typically draw customers from a 2-2.5 mile radius.

Our digital ecosystem provides a fresh and seamless offering for our customers.

Through investment and innovation, we continue to improve our seamless ecosystem to ensure it remains relevant.

We are evolving from a traditional food retailer into a more diverse, food first business.

The number of associates decreased in 2021, compared to 2020, as sales normalized following the peak of the COVID-19 pandemic and we continue to achieve operational efficiencies in our business.

We recognize that our people are our most important asset.

During 2021, we invested more than ever before in our associates to raise our average hourly wage to $17 and our average hourly rate to over $22 with comprehensive benefits included.

Over the last four years, Kroger has invested an incremental $1.2 billion in associate wages and training and our average hourly rate has increased 20%.

In addition, we have committed to invest over $1.8 billion during the same time period to help address underfunding and better secure pensions for tens of thousands of associates.

Since the beginning of the pandemic, our most urgent priority has been to safeguard our associates and customers.

We’ve implemented dozens of new safety and cleanliness processes and procedures in our stores and other facilities.

We have also assessed the likelihood and extent to which different climate risks, such as extreme precipitation, drought and heat stress, would affect different types of facilities and geographies.

Kroger anticipates resetting our current greenhouse gas reduction target to meet with the requirements of the Science Based Target Initiative, which would include aligning with the 1.5°C scenario and setting a new Scope 3 target.

For the fiscal year ended January [removed: 29, 2022.][added: 28, 2023.]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (August [removed: 14, 2021).][added: 13, 2022).]

[removed: 723,308,230] [added: 717,467,532,] shares of Common Stock of $1 par value, as of March [removed: 23, 2022.][added: 22, 2023.]

Portions of Kroger’s definitive proxy statement for its [removed: 2022] [added: 2023] annual meeting of shareholders, which shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates, are incorporated by reference into Part III of this Report.

For the Fiscal Year Ended January [removed: 29, 2022][added: 28, 2023]

| [Item 3](#ITEM3LEGALPROCEEDINGS_398656) | [Legal Proceedings](#ITEM3LEGALPROCEEDINGS_398656) | [removed: 19] [added: 20] |

| [Item 7A](#ITEM7AQUANTITATIVEANDQUALITATIVE_789704) | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM7AQUANTITATIVEANDQUALITATIVE_789704) | [removed: 49] [added: 45] |

| [Item 8](#ITEM8FINANCIALSTATEMENTS_150262) | [Financial Statements and Supplementary Data](#ITEM8FINANCIALSTATEMENTS_150262) | [removed: 51] [added: 48] |

| [Item 9](#ITEM9CHANGESINANDDISAGREEMENTS_94374) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ITEM9CHANGESINANDDISAGREEMENTS_94374) | [removed: 96] [added: 94] |

| [Item 9A](#ITEM9ACONTROLSANDPROCEDURES_212235) | [Evaluation of Disclosure Controls and Procedures](#ITEM9ACONTROLSANDPROCEDURES_212235) | [removed: 96] [added: 94] |

| [Item 9B](#ITEM9BOTHERINFORMATION_351052) | [Other Information](#ITEM9BOTHERINFORMATION_351052) | [removed: 96] [added: 94] |

| [Item 9C](#ITEM_9C_DISCLOSURE_REGARDING_FOREIGN) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ITEM_9C_DISCLOSURE_REGARDING_FOREIGN) | [removed: 96] [added: 94] |

| [Part III](#PARTIII_970612) | ​ | [removed: 97] [added: 95] |

| [Item 10](#ITEM10DIRECTORSEXECUTIVEOFFICERS_174492) | [Directors, Executive Officers and Corporate Governance](#ITEM10DIRECTORSEXECUTIVEOFFICERS_174492) | [removed: 97] [added: 95] |

| [Item 11](#ITEM11EXECUTIVECOMPENSATION_619783) | [Executive Compensation](#ITEM11EXECUTIVECOMPENSATION_619783) | [removed: 97] [added: 95] |

| [Item 12](#ITEM12SECURITYOWNERSHIP_54845) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM12SECURITYOWNERSHIP_54845) | [removed: 97] [added: 95] |

| [Item 13](#ITEM13CERTAINRELATIONSHIPS_678646) | [Certain Relationships and Related Transactions, and Director Independence](#ITEM13CERTAINRELATIONSHIPS_678646) | [removed: 98] [added: 96] |

| [Item 14](#ITEM14PRINCIPALACCOUNTINGFEES_666861) | [Principal Accounting Fees and Services](#ITEM14PRINCIPALACCOUNTINGFEES_666861) | [removed: 98] [added: 96] |

| [Part IV](#PARTIV_153847) | ​ | [removed: 99] [added: 97] |

| [Item 15](#ITEM15EXHIBITSFINANCIALSTATEMENT_412498) | [Exhibits, Financial Statement Schedules](#ITEM15EXHIBITSFINANCIALSTATEMENT_412498) | [removed: 99] [added: 97] |

| [Item 16](#ITEM16FORM10KSUMMARY_429814) | [Form 10-K Summary](#ITEM16FORM10KSUMMARY_429814) | [removed: 101] [added: 99] |

| ​ | [Signatures](#SIGNATURES_425578) | [removed: 102] [added: 100] |

Such statements are indicated by words such as “achieve,” “affect,” “anticipate,” “believe,” “committed,” “continue,” “could,” “deliver,” “effect,” [added: “enable,”] “estimate,” “expects,” “future,” [added: “goal,”] “growth,” [removed: “intends,”] [added: “intended,”] “likely,” “may,” “model,” “objective,” “plan,” “position,” [added: “program,”] “range,” “result,” “strategy,” “strive,” “strong,” “target,” “trend,” “will” and “would,” and similar words or phrases.

| | ● | Our ability to achieve sales, earnings and incremental FIFO operating profit goals may be affected by: [removed: COVID-19 pandemic related factors,] [added: the] risks [removed: and challenges, including] [added: relating to or arising from our proposed transaction with Albertsons Companies, Inc. (“Albertsons”) announced in October 2022, including,] among others, [removed: the length of time that the pandemic continues, future variants, mutations or related strains of the virus and the effectiveness of vaccines against variants, continued efficacy of vaccines over time and availability of vaccine boosters, the extent of vaccine refusal, and global access] [added: our ability] to [removed: vaccines, as well as the effect of vaccine and/or testing mandates and related regulations,] [added: consummate] the [removed: potential for additional future spikes in infection and illness rates] [added: proposed transaction,] including [removed: breakthrough infections among the fully vaccinated, and the corresponding potential for disruptions in workforce availability and customer shopping patterns, re-imposed restrictions as a result of resurgence and] [added: on] the [removed: corresponding future easing] [added: terms] of [removed: restrictions, and interruptions in domestic and global supply chains or capacity constraints; whether and when] the [removed: global pandemic will become endemic,] [added: merger agreement, on] the [removed: pace of recovery when] [added: anticipated timeline, and/or with] the [added: required regulatory approvals; COVID-19] pandemic [removed: subsides or becomes endemic, which may vary materially over time] [added: related factors, risks] and [removed: among the different regions we serve;] [added: challenges;] labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in the labor market; changes in government-funded benefit programs; changes in the types and numbers of businesses that compete with us; pricing and promotional activities of existing and new competitors, including non-traditional competitors, and the aggressiveness of that competition; our response to these actions; the state of the economy, including interest rates, the current inflationary environment and future potential inflationary and/or deflationary trends and such trends in certain commodities, products and/or operating costs; the geopolitical [removed: environment;] [added: environment including the war in Ukraine;] unstable political situations and social unrest; changes in tariffs; the effect that fuel costs have on consumer spending; volatility of fuel margins; manufacturing commodity costs; [added: supply constraints;] diesel fuel costs related to our logistics operations; trends in consumer spending; the extent to which our customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; stock repurchases; changes in the regulatory environment in which we operate; our ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry, including pharmacy benefit managers; our ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of our future growth plans; the ability to execute our [removed: growth] [added: go-to-market] strategy and value creation model, including continued cost savings, growth of our alternative profit businesses, and our ability to better serve our customers and to generate customer loyalty and sustainable growth through our strategic [removed: moats] [added: pillars] of fresh, _Our Brands_, personalization, and seamless; and the successful integration of merged companies and new partnerships. |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

| Yes ☐ | ​ | No ☐ |

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| Yes ☐ | ​ | No ☐ |

$33.6 billion.

| ​ | ​ | ​ |

| ​ | ​ | ​ |

​

| --- | --- | --- |

| --- | --- | --- |

Our ability to complete our proposed transaction with Albertsons may be affected by various factors, including those set forth in Part I, Item 1A of this Annual Report.

Risk Factors included in this Annual Report on Form 10-K and other factors as may be described in subsequent filings with the SEC.

$31.8 billion.

As of January [removed: 29, 2022,] [added: 28, 2023,] we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates.

The total cost of our owned assets and finance leases at January [removed: 29, 2022,] [added: 28, 2023,] was [removed: $49.9] [added: $53.4] billion while the accumulated depreciation was [removed: $26.1] [added: $28.6] billion.

Our common stock is listed on the New York Stock Exchange under the symbol “KR.” As of March [removed: 23, 2022,] [added: 22, 2023,] there were [removed: 25,466] [added: 25,062] shareholders of record.

During [removed: 2020,] [added: 2022,] we paid two quarterly cash dividends of [removed: $0.16] [added: $0.21] per share and two quarterly cash dividends of [removed: $0.18] [added: $0.26] per share.

On March 1, [removed: 2022,] [added: 2023,] we paid a quarterly cash dividend of [removed: $0.21] [added: $0.26] per share.

On March [removed: 10, 2022,] [added: 9, 2023,] we announced that our Board of Directors declared a quarterly cash dividend of [removed: $0.21] [added: $0.26] per share, payable on June 1, [removed: 2022,] [added: 2023,] to shareholders of record at the close of business on May [removed: 13, 2022.][added: 15, 2023.]

[removed: Description automatically generated](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129x10k001.jpg)][added: ]

| Company Name/Index | | [removed: 2016 | |] 2017 | | 2018 | | 2019 | | 2020 | | 2021 | | [added: 2022 | |]

* Total assumes $100 invested on [removed: January 28, 2017,] [added: February 3, 2018,] in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends.

The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale [removed: Corp.,] [added: Corporation,] CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Supervalu Inc. (included through October 19, 2018 when it was acquired by United Natural Foods), Target Corp., Walgreens Boots Alliance [removed: Inc.,] [added: Inc. and] Walmart [removed: Inc., Whole Foods Market] Inc. [removed: (included through August 28, 2017 when it was acquired by Amazon.com, Inc.).]

The following table presents information on our purchases of our common shares during the fourth quarter of [removed: 2021:][added: 2022:]

| (1) | The reported periods conform to our fiscal calendar composed of thirteen 28-day periods. The fourth quarter of [removed: 2021] [added: 2022] contained three 28-day periods. |

| (2) | Includes (i) shares repurchased under [removed: the June 2021 Repurchase Program and the December 2021 Repurchase Program described below in (4), (ii) shares repurchased under] a program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith (“1999 Repurchase Program”) and [removed: (iii) 18,908] [added: (ii) 21,124] shares that were surrendered to the Company by participants under our long-term incentive plans to pay for taxes on restricted stock awards. |

| (3) | Represents shares repurchased under the [removed: June 2021 Repurchase Program, the December 2021 Repurchase Program and the] 1999 Repurchase Program. |

| (4) | On [removed: June 16, 2021, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “June 2021 Repurchase Program”). On December 30, 2021,] [added: September 9, 2022,] our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the [removed: “December 2021] [added: “September 2022] Repurchase Program”). The [removed: December 2021 Repurchase Program authorization replaced the existing June 2021 Repurchase Program. The] amounts shown in this column reflect the amount remaining under the [removed: June 2021 Repurchase Program or the December 2021] [added: September 2022] Repurchase Program as of the specified period end dates. Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The [removed: December 2021] [added: September 2022] Repurchase Program and the 1999 Repurchase Program do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. [added: No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.] |

| The Kroger Co. | | 100 | | 97.48 | | 95.47 | | 125.25 | | 161.03 | | 170.17 | ​ |

| S&P 500 Index | | 100 | | 99.94 | | 121.49 | | 142.45 | | 172.36 | | 160.94 | ​ |

| Peer Group | | 100 | | 97.12 | | 117.20 | | 144.16 | | 170.23 | | 164.97 | ​ |

| November 6, 2022 to December 3, 2022 | | 26,566 | ​ | $ | 47.90 | | 26,566 | ​ | $ | 1,000 | ​ |

| December 4, 2022 to December 31, 2022 | | 87,928 | ​ | $ | 45.83 | | 66,804 | ​ | $ | 1,000 | ​ |

| January 1, 2023 to January 28, 2023 | | 83,500 | ​ | $ | 45.15 | | 83,500 | ​ | $ | 1,000 | ​ |

| Total | | 197,994 | ​ | $ | 45.82 | | 176,870 | ​ | $ | 1,000 | ​ |

​

![Chart, line chart

| The Kroger Co. | | 100 | | 89.60 | | 87.34 | | 85.54 | | 112.22 | | 144.28 | ​ |

| S&P 500 Index | | 100 | | 122.83 | | 122.76 | | 149.23 | | 174.97 | | 211.72 | ​ |

| Peer Group | | 100 | | 129.19 | | 125.47 | | 151.40 | | 186.24 | | 219.91 | ​ |

| November 7, 2021 to December 4, 2021 | | 2,710,844 | ​ | $ | 42.15 | | 2,710,600 | ​ | $ | 387 | ​ |

| December 5, 2021 to January 1, 2022 | | 6,239,527 | ​ | $ | 44.64 | | 6,220,863 | ​ | $ | 140 | ​ |

| January 2, 2022 to January 29, 2022 | | 4,368,946 | ​ | $ | 47.28 | | 4,368,946 | ​ | $ | 821 | ​ |

| Total | | 13,319,317 | ​ | $ | 45.00 | | 13,300,409 | ​ | $ | 821 | ​ |

For the Fiscal Year Ended January [removed: 29, 2022][added: 28, 2023]

| [Report of Independent Registered Public Accounting [removed: Firm](#ReportofIndependentRegisteredPublic)] [added: Firm](#Report_of_independent)] | [removed: 52] [added: 49] |

| [Consolidated Balance Sheets](#BALANCE_SHEETS) | [removed: 55] [added: 52] |

| [Consolidated Statements of Operations](#STATEMENTS_OF_OPERATIONS) | [removed: 56] [added: 53] |

| [Consolidated Statements of Comprehensive Income](#STATEMENTS_COMPREHENSIVE_INCOME) | [removed: 57] [added: 54] |

| [Consolidated Statements of Cash Flows](#STATEMENTS_CASH_FLOWS) | [removed: 58] [added: 55] |

| [Consolidated Statements of Changes in Shareholders’ Equity](#CONSOLIDATEDSTATEMENTOFCHANGESINSHA) | [removed: 59] [added: 56] |

| [Notes to Consolidated Financial Statements](#NOTES_TO_FINANCIAL_STATEMEN) | [removed: 60] [added: 57] |

We have audited the accompanying consolidated balance sheets of The Kroger Co. and its subsidiaries (the “Company”) as of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021,] [added: 29, 2022,] and the related consolidated statements of operations, of comprehensive income, of changes in shareholders' equity and of cash flows for each of the three years in the period ended January [removed: 29, 2022,] [added: 28, 2023,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of January [removed: 29, 2022,] [added: 28, 2023,] based on criteria established in [removed: Internal] [added: _Internal] Control - Integrated [removed: Framework] [added: Framework_] (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021,] [added: 29, 2022,] and the results of its operations and its cash flows for each of the three years in the period ended January [removed: 29, 2022] [added: 28, 2023] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January [removed: 29, 2022,] [added: 28, 2023,] based on criteria established in [removed: Internal] [added: _Internal] Control - Integrated [removed: Framework] [added: Framework_] (2013) issued by the COSO.

[removed: Goodwill] [added: _Goodwill] Impairment Assessment – Kroger Specialty Pharmacy (“KSP”) Reporting [removed: Unit][added: Unit_]

As described in Notes 1 and 2 to the consolidated financial statements, the Company’s consolidated goodwill balance was [removed: $3.1] [added: $2.9] billion as of January [removed: 29, 2022] [added: 28, 2023] and the goodwill associated with the KSP reporting unit was [removed: $242] [added: $243] million.

[removed: As disclosed by management, the] [added: The] fair value of the Company's KSP reporting unit was estimated using multiple valuation techniques, a discounted cash flow model (income approach), a market multiple model and comparable mergers and acquisition model (market approaches), with each method weighted in the calculation.

| ​ | | January [removed: 29,] [added: 28,] | | | January [removed: 30,] [added: 29,] | | |

| (In millions, except par amounts) | ​ | [removed: 2022] [added: 2023] | | ​ | [removed: 2021] [added: 2022] | | |

| Cash and temporary cash investments | ​ | $ | [removed: 1,821] [added: 1,015] | ​ | $ | [removed: 1,687] [added: 1,821] | ​ |

| Store deposits in-transit | ​ | | [removed: 1,082] [added: 1,127] | ​ | | [removed: 1,096] [added: 1,082] | ​ |

| Receivables | ​ | | [removed: 1,828] [added: 2,234] | ​ | | [removed: 1,781] [added: 1,828] | ​ |

| FIFO inventory | ​ | | [removed: 8,353] [added: 9,756] | ​ | | [removed: 8,436] [added: 8,353] | ​ |

| LIFO reserve | ​ | | [removed: (1,570)] [added: (2,196)] | ​ | | [removed: (1,373)] [added: (1,570)] | ​ |

| Prepaid and other current assets | ​ | ​ | [removed: 660] [added: 734] | ​ | ​ | [removed: 876] [added: 660] | ​ |

| Total current assets | ​ | | [removed: 12,174] [added: 12,670] | ​ | | [removed: 12,503] [added: 12,174] | ​ |

| Property, plant and equipment, net | ​ | | [removed: 23,789] [added: 24,726] | ​ | | [removed: 22,386] [added: 23,789] | ​ |

| Operating lease assets | ​ | ​ | [removed: 6,695] [added: 6,662] | ​ | ​ | [removed: 6,796] [added: 6,695] | ​ |

| Intangibles, net | ​ | | [removed: 942] [added: 899] | ​ | | [removed: 997] [added: 942] | ​ |

| Goodwill | ​ | | [removed: 3,076] [added: 2,916] | ​ | | 3,076 | ​ |

| Other assets | ​ | | [removed: 2,410] [added: 1,750] | ​ | | [removed: 2,904] [added: 2,410] | ​ |

| Total Assets | ​ | $ | [removed: 49,086] [added: 49,623] | ​ | $ | [removed: 48,662] [added: 49,086] | ​ |

| Current portion of long-term debt including obligations under finance leases | ​ | $ | [removed: 555] [added: 1,310] | ​ | $ | [removed: 911] [added: 555] | ​ |

| Current portion of operating lease liabilities | ​ | ​ | [removed: 650] [added: 662] | ​ | ​ | [removed: 667] [added: 650] | ​ |

| Trade accounts payable | ​ | | [removed: 7,117] [added: 7,119] | ​ | | [removed: 6,679] [added: 7,117] | ​ |

| Accrued salaries and wages | ​ | | [removed: 1,736] [added: 1,746] | ​ | | [removed: 1,413] [added: 1,736] | ​ |

| Other current liabilities | ​ | | [removed: 6,265] [added: 6,401] | ​ | | [removed: 5,696] [added: 6,265] | ​ |

| Total current liabilities | ​ | | [removed: 16,323] [added: 17,238] | ​ | | [removed: 15,366] [added: 16,323] | ​ |

| Long-term debt including obligations under finance leases | ​ | ​ | [removed: 12,809] [added: 12,068] | ​ | ​ | [removed: 12,502] [added: 12,809] | ​ |

| Noncurrent operating lease liabilities | ​ | ​ | [removed: 6,426] [added: 6,372] | ​ | ​ | [removed: 6,507] [added: 6,426] | ​ |

| Deferred income taxes | ​ | | [removed: 1,562] [added: 1,672] | ​ | | [removed: 1,542] [added: 1,562] | ​ |

| Pension and postretirement benefit obligations | ​ | | [removed: 478] [added: 436] | ​ | | [removed: 535] [added: 478] | ​ |

March 28, 2023

| SHAREOWNERS’ EQUITY | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

Years Ended January 28, 2023, January 29, 2022 and January 30, 2021

Years Ended January 28, 2023, January 29, 2022 and January 30, 2021

| Goodwill and fixed asset impairment charges related to Vitacost.com | ​ | ​ | 164 | ​ | ​ | — | ​ | ​ | — | ​ |

| Inventories | ​ | | (1,370) | ​ | | 80 | ​ | | 7 | ​ |

| Financing fees paid | ​ | ​ | (84) | ​ | ​ | (5) | ​ | ​ | (9) | ​ |

| Other | ​ | ​ | (112) | ​ | | (156) | ​ | | (125) | ​ |

Years Ended January 28, 2023, January 29, 2022 and January 30, 2021

| Balances at January 28, 2023 | | 1,918 | ​ | $ | 1,918 | ​ | $ | 3,805 | | 1,202 | ​ | $ | (20,650) | ​ | $ | (632) | ​ | $ | 25,601 | ​ | $ | (28) | ​ | $ | 10,014 |

The Company is a food and drug retailer that operates 2,719 supermarkets, 2,252 pharmacies and 1,637 fuel centers across 35 states while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience.

As of January 28, 2023, the Company had $65 and $249 in “Other current liabilities” and “Trade accounts payable,” respectively, associated with financing arrangements.

As of January 29, 2022, the Company had $59 and $236 in “Other current liabilities” and “Trade accounts payable,” respectively, associated with financing arrangements.

During the first quarter of 2023, the Company will make the final contingent consideration payment, which is based on the fair value of the outstanding year-end 2022 liability.

As of January 28, 2023, the years ended February 1, 2020 and forward remain open for review for federal income tax purposes.

The following table summarizes the changes in the Company’s net goodwill balance through January 28, 2023:

| Balance beginning of year | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Goodwill | ​ | $ | 5,737 | ​ | $ | 5,737 | ​ |

| Accumulated impairment losses | ​ | | (2,661) | ​ | | (2,661) | ​ |

| Subtotal | ​ | | 3,076 | ​ | | 3,076 | ​ |

| Activity during the year | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Impairment charge related to Vitacost.com | ​ | ​ | (160) | ​ | ​ | — | ​ |

| Balance end of year | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Goodwill | ​ | | 5,737 | ​ | | 5,737 | ​ |

| Accumulated impairment losses | ​ | | (2,821) | ​ | | (2,661) | ​ |

| Total Goodwill | ​ | $ | 2,916 | ​ | $ | 3,076 | ​ |

Based on the results of the Company’s impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment.

In the fourth quarter of 2022, as the Company’s digital strategy evolved, the Company’s primary focus will be to effectively utilize its Pickup and Delivery capabilities.

This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160.

The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022.

There is no goodwill remaining for Vitacost.com as of January 28, 2023.

| 2027 | ​ | | 2 |

| Impairment of goodwill related to Vitacost.com | ​ | 1.2 | ​ | — | ​ | — | ​ |

The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits.

| Unrealized losses on hedging instruments | ​ | | 74 | ​ | | — | ​ |

As of January 28, 2023, the years ended February 1, 2020 and forward remain open for review for federal income tax purposes.

| ​ | | 2023 | | | 2022 | |

The Credit Agreement contains a covenant, which, among other things, requires the maintenance of a Leverage Ratio of not greater than (i) 3.50:1.00 or (ii) upon the consummation of the proposed merger with Albertsons, 4.50 to 1.00, with step downs to 4.25:1.00, 4.00:1.00, 3.75:1.00 and 3.50:1.00 effective at the end of the third, fifth, seventh and ninth, full fiscal quarters after the consummation of the proposed merger, respectively.

On October 13, 2022, the Company entered into a merger agreement with Albertsons Companies, Inc. (“Albertsons”).

For additional information about the Company’s unsecured bridge term loan facility and term loan credit agreement associated with the merger agreement, see Note 16 to the Consolidated Financial Statements.

| --- | --- |

*​*

March 29, 2022

| SHAREHOLDERS’ EQUITY | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Gain on sale of businesses | ​ | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 176 | ​ |

| Cumulative effect of accounting change(4) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (146) |

| (4) | Related to the adoption of Accounting Standards Update (“ASU”) 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” (See Note 17 for additional details). |

| Gain on sale of businesses | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (176) | ​ |

| Loss on deconsolidation and impairment of Lucky's Market | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 412 | ​ |

| Inventories | ​ | | 80 | ​ | | 7 | ​ | | (351) | ​ |

| Proceeds from contract associated with sale of business | ​ | ​ | — | ​ | | — | ​ | | 295 | ​ |

| Net proceeds from sale of businesses | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 327 | ​ |

| Other | ​ | ​ | (161) | ​ | | (134) | ​ | | (46) | ​ |

| Balances at February 2, 2019 | | 1,918 | ​ | $ | 1,918 | ​ | $ | 3,245 | | 1,120 | ​ | $ | (16,612) | ​ | $ | (346) | ​ | $ | 19,681 | ​ | $ | (51) | ​ | $ | 7,835 |

| Cumulative effect of accounting change (see note 17) | ​ | — | ​ | | — | ​ | ​ | — | | — | ​ | | — | ​ | ​ | — | ​ | ​ | 146 | ​ | ​ | — | ​ | ​ | 146 |

| Deconsolidation of Lucky's Market | ​ | — | ​ | | — | ​ | ​ | — | | — | ​ | | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 168 | ​ | ​ | 168 |

As of January 29, 2022, the Company was one of the largest retailers in the world based on annual sales.

Refer to Note 17 for a description of changes to the Consolidated Financial Statements for recently adopted accounting standards regarding the implementation costs of cloud computing arrangements.

The decrease in the 2021 and 2020 impairment charges, compared to 2019, was the result of 35 planned store closures in 2020 recognized in 2019.

These obligations are included in “Other current liabilities” in the Consolidated Balance Sheets.

In 2019, an adjustment to decrease the contingent consideration liability as of year-end 2019 was recorded for ($69) in OG&A expense.

As of January 29, 2022, the Internal Revenue Service had concluded its examination of all federal tax returns up to and including the return for the year ended February 3, 2018.

The Company’s goodwill balance as of January 29, 2022 and January 30, 2021 was $3,076.

Gross goodwill and accumulated impaired losses were $5,737 and $2,661, respectively, as of January 29, 2022 and January 30, 2021.

| Impairment losses attributable to noncontrolling interest | ​ | — | ​ | — | ​ | 1.2 | ​ |

The 2019 tax rate differed from the federal statutory rate primarily due to the effect of state income taxes and Lucky’s Market losses attributable to the noncontrolling interest, which reduced pre-tax income but did not impact tax expense.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020, includes measures to assist companies in response to the COVID-19 pandemic.

These measures include deferring the due dates of tax payments and other changes to income and non-income-based tax laws.

As permitted under the CARES Act, the Company deferred the remittance of the employer portion of the social security tax.

The social security tax provision requires that the deferred employment tax be paid over two years, with half of the amount required to be paid by December 31, 2021 and the other half to be paid by December 31, 2022.

During 2020, the Company deferred the employer portion of social security tax of $622.

Of the total, $311 was paid during 2021 and $311 is included in “Other current liabilities” in the Company’s Consolidated Balance Sheets.

In 2020, the Company issued $500 of senior notes due in fiscal year 2030 bearing an interest rate of 2.20% and $500 of senior notes due in fiscal year 2030 bearing interest rate of 1.70%.

In connection with the senior note issuances, the Company also terminated forward-starting interest rate swap agreements with an aggregate notional amount of $450 due in fiscal year 2030.

Since these forward-starting interest rate swap agreements were classified as cash flow hedges, the unamortized loss of $41, $31 net of tax, has been deferred in Accumulated Other Comprehensive Loss and will continue to amortize to earnings as the interest payments are made.

On March 18, 2020, the Company proactively borrowed $1,000 under the revolving credit facility.

This was a precautionary measure in order to preserve financial flexibility, reduce reliance on the commercial paper market and maintain liquidity in response to the COVID-19 pandemic.

During 2020, the Company fully repaid the $1,000 borrowed under the revolving credit facility and the entire $1,150 in outstanding commercial paper obligations, as of February 1, 2020, using cash generated by operations.

The Credit Agreement includes fallback language related to the transition from LIBOR to alternative reference rates.

The Company does not expect a significant change to its cost of debt as a result of the transition from LIBOR to an alternative reference rate.

As of January [removed: 29, 2022,] [added: 28, 2023,] our Chief Executive Officer and Chief Financial Officer, together with a disclosure review committee appointed by the Chief Executive Officer, evaluated the Company’s disclosure controls and procedures.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of January [removed: 29, 2022.][added: 28, 2023.]

As of January [removed: 29, 2022,] [added: 28, 2023,] there have been no material additional implementations of modules since the [removed: beginning of the first] [added: third] quarter of [removed: 2021.][added: 2022.]

There were no changes in Kroger’s internal control over financial reporting that materially affected, or were reasonably likely to materially affect, Kroger’s internal control over financial reporting during the quarter ended January [removed: 29, 2022.][added: 28, 2023.]

Based on the evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of January [removed: 29, 2022.][added: 28, 2023.]

The effectiveness of the Company’s internal control over financial reporting as of January [removed: 29, 2022,] [added: 28, 2023,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which can be found in Item 8 of this Form 10-K.

In the third quarter of 2022, a new payroll module was implemented.

The information required by this Item 10 with respect to executive officers is included within Item 1 in Part I of this Annual Report on Form 10-K under the caption “Information about our Executive Officers.” The information required by this Item not otherwise set forth in Part I above or in this Item 10 of Part III is set forth under the headings Election of Directors, Information Concerning the Board of Directors- Committees of the Board, Information Concerning the Board of Directors- Audit Committee and Delinquent 16(a) [removed: Reports] [added: Reports, if required,] in the definitive proxy statement to be filed by the Company with the Securities and Exchange Commission within 120 days after the end of the fiscal year [removed: 2021] [added: 2022] (the [removed: “2022] [added: “2023] proxy statement”) and is hereby incorporated by reference into this Form 10-K.

The information required by this Item is set forth in the sections entitled Compensation Discussion and Analysis, Compensation Committee Report, and Compensation Tables in the [removed: 2022] [added: 2023] proxy statement and is hereby incorporated by reference into this Form 10-K.

The remainder of the information required by this Item is set forth in the section entitled Beneficial Ownership of Common Stock in the [removed: 2022] [added: 2023] proxy statement and is hereby incorporated by reference into this Form 10-K.

| Equity compensation plans approved by security holders | | 20,021,688 | ​ | $ | 30.81 | | 53,470,441 | ​ |

| Total | | 20,021,688 | ​ | $ | 30.81 | | 53,470,441 | ​ |

| (1) | The total number of securities reported includes the maximum number of common shares, 3,383,338, that may be issued under performance units granted under our long-term incentive plans. The nature of the awards is more particularly described in the Compensation Discussion and Analysis section of the definitive 2023 proxy statement and is hereby incorporated by reference into this Form 10-K. The weighted-average exercise price in column (b) does not take these performance unit awards into account. Based on historical data, or in the case of the awards made in 2020 through 2022 and earned in 2022 the actual payout percentage, our best estimate of the number of common shares that will be issued under the performance unit grants is approximately 3,872,462. |

| --- | --- |

| Equity compensation plans approved by security holders | | 29,683,904 | ​ | $ | 28.15 | | 19,319,196 | ​ |

| Total | | 29,683,904 | ​ | $ | 28.15 | | 19,319,196 | ​ |

(1)The total number of securities reported includes the maximum number of common shares, 8,541,763, that may be issued under performance units granted under our long-term incentive plans.

The nature of the awards is more particularly described in the Compensation Discussion and Analysis section of the definitive 2022 proxy statement and is hereby incorporated by reference into this Form 10-K.

The weighted-average exercise price in column (b) does not take these performance unit awards into account.

Based on historical data, or in the case of the awards made in 2019 through 2021 and earned in 2021 the actual payout percentage, our best estimate of the number of common shares that will be issued under the performance unit grants is approximately 4,504,253.

The information required by this Item is set forth in the sections entitled Related Person Transactions and Information Concerning the Board of Directors-Independence in the [removed: 2022] [added: 2023] proxy statement and is hereby incorporated by reference into this Form 10-K.

The information required by this Item is set forth in the section entitled Ratification of the Appointment of Kroger’s Independent Auditor in the [removed: 2022] [added: 2023] proxy statement and is hereby incorporated by reference into this Form 10-K.

| ​ | ​ | Consolidated Balance Sheets as of January [removed: 29, 2022] [added: 28, 2023] and January [removed: 30, 2021] [added: 29, 2022] |

| ​ | ​ | Consolidated Statements of Operations for the years ended January [added: 28, 2023, January] 29, [removed: 2022,] [added: 2022 and] January 30, 2021 [removed: and February 1, 2020] |

| ​ | ​ | Consolidated Statements of Comprehensive Income for the years ended January [added: 28, 2023, January] 29, [removed: 2022,] [added: 2022 and] January 30, [removed: 2021and February 1, 2020] [added: 2021] Consolidated Statements of Cash Flows for the years ended January [added: 28, 2023, January] 29, [removed: 2022,] [added: 2022 and] January 30, 2021 [removed: and February 1, 2020] |

| ​ | ​ | Consolidated Statement of Changes in Shareholders’ Equity for the years ended January [added: 28, 2023, January] 29, [removed: 2022,] [added: 2022 and] January 30, 2021 [removed: and February 1, 2020] |

| [removed: 10.6] [added: 10.7] | ​ | [removed: [Amended and Restated] [added: [Amendment No. 1 to] Credit [removed: Agreement] [added: Agreement,] dated [removed: July 6, 2021,] [added: as of November 9, 2022, by and] among The Kroger Co., the [removed: initial] lenders [removed: named therein,] [added: party thereto,] and Bank of America, [removed: N.A. and Wells Fargo Bank, National Association, as co-administrative agents, Citibank,] N.A., as [removed: syndication agent, and Mizuho Bank, Ltd.] [added: paying agent to the Amended] and [removed: U.S. Bank National Association, as co-documentation agents,] [added: Restated Credit Agreement dated July 6, 2021,] incorporated by reference to Exhibit [removed: 10.1] [added: 10.2] of the Company’s Current Report on Form 8-K filed with the SEC on [removed: July 7, 2021.](http://www.sec.gov/Archives/edgar/data/56873/000110465917054301/a17-21118_1ex10d1.htm)] [added: November 10, 2022.](https://www.sec.gov/Archives/edgar/data/56873/000110465922117123/tm2230116d1_ex10-2.htm)] |

| [removed: 10.7*] [added: 10.8] | ​ | [The Kroger Co. 2008 Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 4.2 of the Company’s Form S-8 filed with the SEC on June 26, 2008.](http://www.sec.gov/Archives/edgar/data/56873/000110465908042413/a08-17314_1ex4d2.htm) |

| [removed: 10.8*] [added: 10.9] | ​ | [The Kroger Co. 2011 Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 4.2 of the Company’s Form S-8 filed with the SEC on June 23, 2011.](http://www.sec.gov/Archives/edgar/data/56873/000110465911036146/a11-15415_1ex4d2.htm) |

| [removed: 10.9*] [added: 10.10] | ​ | [The Kroger Co. 2014 Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 4.2 of the Company’s Form S-8 filed with the SEC on July 29, 2014.](http://www.sec.gov/Archives/edgar/data/56873/000110465914054520/a14-17907_1ex4d2.htm) |

| [removed: 10.10*] [added: 10.11*] | ​ | [The Kroger Co. 2019 Long-Term Incentive Plan. Incorporated by reference to Exhibit 99.1 of the Company’s Form S-8 filed with the SEC on June 28, 2019.](http://www.sec.gov/Archives/edgar/data/56873/000110465919038276/a19-12068_1ex99d1.htm) |

| [removed: 10.11*] [added: 10.12*] | ​ | [Form of Restricted Stock Grant Agreement under Long-Term Incentive Cash Bonus Plans. Incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.](https://www.sec.gov/Archives/edgar/data/56873/000155837020003501/kr-20200201ex1011d57ca.htm) |

| [removed: 10.12*] [added: 10.13*] | ​ | [Form of Restricted Stock Grant Agreement under Long-Term Incentive and Cash Bonus Plans. Incorporated by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2007.](http://www.sec.gov/Archives/edgar/data/56873/000120677407000901/exhibit10-9.htm) |

| [removed: 10.13*] [added: 10.14*] | ​ | [Form of Non-Qualified Stock Option Grant Agreement under Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.](https://www.sec.gov/Archives/edgar/data/56873/000155837020003501/kr-20200201ex1013d552d.htm) |

| [removed: 10.14*] [added: 10.15*] | ​ | [Form of Non-Qualified Stock Option Grant Agreement under Long-Term Incentive and Cash Bonus Plans. Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended May 24, 2008.](http://www.sec.gov/Archives/edgar/data/56873/000110465908043802/a08-17829_1ex10d1.htm) |

| [removed: 10.15*] [added: 10.16*] | ​ | [Form of Performance Unit Award Agreement under Long-Term Incentive and Cash Bonus Plans. Incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.](https://www.sec.gov/Archives/edgar/data/56873/000155837020003501/kr-20200201ex1015272d7.htm) |

| [removed: 10.16*] [added: 10.17*] | ​ | [Form of Restricted Stock Grant Agreement under Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2021.](https://www.sec.gov/Archives/edgar/data/56873/000155837021003706/kr-20210130xex10d16.htm) |

| 21.1 | ​ | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129xex21d1.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex21d1.htm)] |

| 23.1 | ​ | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129xex23d1.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex23d1.htm)] |

| 24.1 | ​ | [Powers of [removed: Attorney.](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129xex24d1.htm)] [added: Attorney.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex24d1.htm)] |

| 31.1 | ​ | [Rule 13a-14(a)/15d-14(a) [removed: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129xex31d1.htm)] [added: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex31d1.htm)] |

| 31.2 | ​ | [Rule 13a-14(a)/15d-14(a) [removed: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129xex31d2.htm)] [added: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex31d2.htm)] |

| 32.1 | ​ | [Section 1350 [removed: Certifications.](https://www.sec.gov/Archives/edgar/data/56873/000155837022004595/kr-20220129xex32d1.htm)] [added: Certifications.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex32d1.htm)] |

| 2.1 | ​ | [Agreement and Plan of Merger, dated as of October 13, 2022, by and among the Company, Parent and Merger Sub, is hereby incorporated by reference to Exhibit 2.1 of the Company’s 8-K filed with the SEC on October 14, 2022.](https://www.sec.gov/Archives/edgar/data/56873/000110465922108671/tm2227942d1_ex2-1.htm) |

| 10.6 | ​ | [Term Loan agreement, dated as of November 9, 2022, by and among The Kroger Co., the lenders from time to time party thereto, and Citibank, N.A., as administrative agent for the lenders, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2022.](https://www.sec.gov/Archives/edgar/data/56873/000110465922117123/tm2230116d1_ex10-1.htm) |

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| Dated: March [removed: 29, 2022] [added: 28, 2023] | /s/ W. Rodney McMullen |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities indicated on the [removed: 29th] [added: 28th of] March [removed: 2022.][added: 2023.]