Slide 1: Creating Significant, Sustainable Value for All Stakeholders
Creating Significant, Sustainable Value for All Stakeholders May 2022
Slide 2: Disclaimer
2 Disclaimer Important Additional Information and Where to Find It The Company has filed a definitive proxy statement on Schedule 14A and WHITE proxy card with the Securities and Exchange Comm iss ion (“SEC”) in connection with the solicitation of proxies for its 2022 Annual Meeting of Shareholders
Slide 3: Our Strategic Execution, Corporate Governance, and Sustainability Policies Driving Value
3 Our Strategic Execution, Corporate Governance, and Sustainability Policies and Practices are Driving Value for All Stakeholders • As America’s grocer, Kroger is committed to delivering fresh and affordable food for everyone , supporting a sustainable food supply to feed America for generations to
Slide 4: Executive Summary
4 Executive Summary 1. Source: Bloomberg, Capital IQ, Company filings as of May 24, 2022; Total Shareholder Return (TSR) defined as share price perf orm ance plus impact of reinvested dividends. Last 3 Years reflects period beginning May 24, 2019 and ending May 24, 2022. Executing a winning strategy
Slide 5: Kroger is America's Grocer
Kroger is America’s Grocer 5
Slide 6: Think Food, Think Kroger: Fresh for Everyone
6 Think Food, Think Kroger: Fresh for Everyone 1. As of January 29, 2022 6 As America’s grocer, Kroger is committed to delivering fresh food at affordable prices, redefining the customer experience and giving back to our communities We are one of the world’s largest food retailers: 60M households sh
Slide 7: Our Role in the Future of Food
7 7 Our Role in the Future of Food We are helping build a more resilient and equitable food system that preserves access and affordability – today and in the future – by advancing more sustainable, higher - welfare production methods Global Challenge How Kroger is Addressing it • Global population e
Slide 8: Kroger by the Numbers
8 Kroger by the Numbers 1. Source: Bloomberg, Capital IQ, Company filings as of May 24, 2022; Total Shareholder Return (TSR) defined as share price perf orm ance plus impact of reinvested dividends. Last 3 Years reflects period beginning May 24, 2019 and ending May 24, 2022. 2. Adjusted FIFO Operati
Slide 9: We Serve All of America
9 70% of customers chose grocery retailers based on quality of fresh categories 92% of our customers buy fresh products from us We Serve All of America … Our Customers: 9 72% of U.S. shoppers have average annual income under $100K 40% of U.S. households have average annual income under $50K 28% of t
Slide 10: Serving customers with fresh, health and value
10 • Highest ranked national retailer in Fresh perception • Kroger H ealth believes in f ood as medicine and operates retail pharmacies and health clinics, while advancing health outcomes through nutrition services and diet - aligned & better - for - you foods • Culinary innovation and expanding lin
Slide 11: While Serving as a Key Pillar of Our Communities
11 … While Serving as a Key Pillar of Our Communities As part of Kroger’s Zero Hunger | Zero Waste plan, partnering with Feeding America's network of food banks to rescue about 100M pounds of surplus fresh food annually for redistribution in our communities; charitable giving to improve food securit
Slide 12: Executing a Winning Strategy
12 Executing a Winning Strategy 12
Slide 13: Restock Kroger: How We Got Here
13 Restock Kroger • Eliminated $3B in costs; invested in people, technology and price • Strengthened competitive moats: Fresh, Our Brands , Personalization & Seamless • Established alternative profit flywheel • Talent investments & development • Zero Hunger | Zero Waste social & environmental impact
Slide 14: Our Winning Strategy is Underpinned by Our Unique Competitive Moats
14 Our Winning Strategy is Underpinned by Our Unique Competitive Moats 14 Fresh #1 determinant of store choice for customers Personalization >50% of all items in a digital basket were added through personalization science Our Brands 9th largest CPG in the U . S . with four $1B + brands Seamless Acce
Slide 15: Enhancing Customer Loyalty Through Our Competitive Moats
15 Enhancing Customer Loyalty and Attracting New Customers Through Our Competitive Moats Fresh Personalization Our Brands Seamless • Fresh sales growth increased 15.6% since 2019 outpacing overall sales growth • Home Chef Œ has surpassed $1B in annual sales • Go Fresh & Local Supplier Accelerator su
Slide 16: Our Results Demonstrate Our Strategy is Working
16 Our Results Demonstrate Our Strategy is Working 1. 2 - year basis CAGR represents the compounded annual growth rate utilizing annual 2019 as the base year. Adjusted FIFO Operating P rofit is a non - GAAP measure used by management. See page 57 for more information, including a reconciliation to G
Slide 17: Our Value Creation Model is Built for Sustainable Growth
17 Our Value Creation Model is Built for Sustainable Growth 8 – 11 % TSR* Fast Growing Alternative Profits Strong, Durable Retail Supermarket Business Food Platform Data & Traffic & Revenue Traffic *Total shareholder return over time assumes no change in Kroger’s PE ratio 17
Slide 18: 2022 Spend Allocation
18 2022 Spend Allocation Sales Growth Digital Acceleration Maintain the Business Margin Expansion Our Capital is Invested in High Return Opportunities • Significant shift in allocation to support transformation journey • Prioritizing highest growth opportunities with strong financial returns • Focus
Slide 19: Strong Balance Sheet and Capital Returns are Priorities
19 In Addition to Growth Investments, Maintaining a Strong Balance Sheet and Capital Returns are Priorities 1. The ratio of Net Debt to Adjusted EBITDA, as defined under our credit facility Investing in the Business for Long - Term Sustainable Growth Maintaining Current Investment Grade Rating C on
Slide 20: Committed to Delivering Superior, Sustainable Total Returns
20 We are Committed to Delivering Superior, Sustainable Total Returns 1. Source: Bloomberg, Capital IQ, Company filings as of May 24, 2022; Total Shareholder Return (TSR) defined as share price perf orm ance plus impact of reinvested dividends. Last 3 Years reflects period beginning May 24, 2019 and
Slide 21: Analysts Recognize Our Strategic Execution
21 Analysts Recognize Our Strategic Execution — Including Our Execution on ESG Priorities — to Drive Value for All Note: Permission to use quotations neither sought nor obtained. Emphasis in blue font added by Kroger. “Kroger has raised wages amid a tight labor market. Recently, Kroger raised its av
Slide 22: Robust ESG Strategy, Practices & Programs
22 Robust ESG Strategy, Practices & Programs
Slide 23: Sustainability is a Long-Standing Priority for Kroger
23 Sustainability is a Long - Standing Priority for Kroger Leading with Our 2030 ESG Strategy Food Access, Health & Nutrition Just & Inclusive Community Climate Impact Resource Conservation Business Integration Responsible & Resilient Systems People Planet Systems Introduced Framework for Action: Di
Slide 24: Robust, Board-Led Oversight of ESG Strategy & Topics
24 We Have Robust, Board - Led Oversight of ESG Strategy & Topics 24 Our sustainability journey began decades ago. In addition to oversight by the full Board, in 1977 we established a dedicated Public Responsibilities Committee (PRC) of the Board to deepen Board oversight and underscore our commitme
Slide 25: Zero Hunger | Zero Waste is the Centerpiece of Our ESG Strategy
25 25 Zero Hunger | Zero Waste is the Centerpiece of Our Comprehensive ESG Strategy Climate Impact: Reducing climate impact and supporting the transition to a lower - carbon economy by investing in energy efficiency and renewable energy and by reducing food waste and refrigerant emissions. Resource
Slide 26: A Broad Range of ESG Topics Embedded in Our Business
26 We Have a Broad Range of ESG Topics Embedded in Our Business Stakeholder feedback informs our policies and practices; engage with 70+ ESG stakeholder organizations on 30+ ESG topics annually, including: People Planet Systems Food Access, Health & Safety ▪ Food & Product Safety – Retail Stores – M
Slide 27: Stakeholder Collaboration Informs Our Strategy & Policies
27 Stakeholder Collaboration Informs Our Strategy & Policies Shareholders NGOs Associates In 2021, Kroger met with shareholders representing 47% of outstanding shares. In addition, Kroger met with stewardship teams representing 34% of its outstanding shares to discuss ESG topics. Engagement shaped u
Slide 28: 2025 Zero Hunger | Zero Waste Commitments Progress
28 2025 Zero Hunger | Zero Waste Commitments Progress (2017 – 2021) Meals: Directed 3B meals to our communities 2.3B meals Surplus food: Optimize surplus food recovered through Zero Hunger | Waste Food Rescue program 500M pounds Donations: 100% of retail stores rescue food >93% 1 Direct charitable g
Slide 29: We Invest in Our Associates
29 We Invest in Our Associates Because They Activate Our Purpose to Feed the Human Spirit 29 25.9 % INCREASE IN AVERAGE HOURLY COMPENSATION SINCE 2017 2017 2018 2019 2020 2021 INCLUDES COMPREHENSIVE BENEFITS PEOPLE Since 2018, our incremental wage investments total $1.2B For many associates, Kroger
Slide 30: Our Investments in Associates Go Beyond Wages
30 For Kroger, Our Investments in Associates Go Beyond Wages Data as of TIMEFRAME Advancement Leadership development curriculum encourages internal progression 1,125 associates graduated from the Store Leader Development Program in 2021 Work Simplification Utilizing workforce analytics and business
Slide 31: Our DE&I Framework Promotes Positive Change
31 Our goal is to shift the demographic representation of women and people of color at the local and enterprise levels to reflect our country, communities and local neighborhoods Our DE&I Framework Promotes Positive Change in Our Workplace and Communities 1. 2021 U.S. Census Estimate Data 2. Kroger
Slide 32: Responsible Sourcing and Supply Chain Accountability
32 Responsible Sourcing and Supply Chain Accountability x Responsible Sourcing Framework x Vendor Code of Conduct x Human Rights Policy x Animal Welfare Policy x Seafood Sustainability Policy x No - Deforestation Commitment x Safer Chemicals Statement x Pollinator Protection Statement x General Merc
Slide 33: Governance Oversight Structure Designed to Advance Animal Welfare
33 Our Governance Oversight Structure is Designed to Advance Animal Welfare • Public Responsibilities Committee of the Board comprises independent directors who bring extensive leadership experience and valuable perspectives on topics related to environmental sustainability, social impact, and ESG g
Slide 34: We are Committed to Promoting Animal Welfare
34 We are Committed to Promoting Animal Welfare … Our Animal Welfare Policy statement regarding sow housing published in 2018: We recognize that sows in the pork industry may experience negative health and behavioral impacts when housed in gestation stalls (also known as gestation crates) during pre
Slide 35: Delivering Fresh, Affordable Food to Our Customers
35 … And Delivering Fresh, Affordable Food to Our Customers 1. IRI 2. Statista, 2019 data (https://www.statista.com/statistics/1051294/american - consumers - buying - pork - by - type/) 2. Yankelovich Partners study for the National Pork Producers Council found 66% of Americans age 18 - 59 eat pork
Slide 36: Managing Climate Impact and Resource Conservation
36 Managing Climate Impact and Resource Conservation are Key Elements of Our ESG Strategy 36 PLANET - 30 % by 2030 Reduction in Scope 1 & 2 emissions from a 2018 baseline Committed to align with Science Based Targets initiative Revising Scope 1 and 2 target to align with 1.5⁰C scenario; setting new
Slide 37: We Offer Customers Sustainable Product Options
37 We carry products with leading third - party certifications, such as: We Offer Customers Sustainable Product Options • Average Kroger store contains >4,000 natural and organic products • Simple Truth ® product line has nearly 1,500 unique products, achieving >$3B in annual sales • Achieved commit
Slide 38: Strong ESG Practices Widely Recognized
38 Kroger’s Strong ESG Practices, Programs, and Achievements are Widely Recognized Top Quartile ESG Ratings Best 14 th Percentile Food Retail 38 Nation’s Top Employers’ Responses to Pandemic
Slide 39: Strong, Highly Qualified Board
39 Strong, Highly Qualified Board
Slide 40: We Have a Highly Qualified Board
40 We Have a Highly Qualified Board … Rodney McMullen Chair & CEO, Kroger Strong sector experience; expertise in finance, operations, retail, strategic partnerships Public Company Boards: VF Corporation Ronald Sargent Former Chair & CEO, Staples, Inc. Lead Director Designated financial expert; exper
Slide 41: Relevant Skills and Experience to Oversee Strategic Execution
41 … With Relevant Skills and Experience to Oversee Strategic Execution and Drive Superior Value Creation … Nora Aufreiter Kevin Brown Elaine Chao Anne Gates Karen Hoguet Rodney McMullen Clyde Moore Ronald Sargent Amanda Sourry Mark Sutton Ashok Vemuri Business Management ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Retai
Slide 42: For a Large and Complex Business More than a Grocery Store
42 … For a Large and Complex Business that is More than a Grocery Store … 42 Private Label Food Producer Operating 33 food production facilities providing high - quality Our Brands products Nationwide Pharmacy 2,200+ pharmacies serving 18.4M patients and filling 300M+ prescriptions Fuel Provider ~1,
Slide 43: Focus on a Broad Range of ESG Topics Critical to Our Business
… With a Focus on a Broad Range of ESG Topics Critical to Our Business PEOPLE Food Access, Health & Safety • Elaine Chao , former U.S. Secretary of Labor; former CEO, United Way of America • Rodney McMullen , Chairman & CEO, Kroger • Amanda Sourry , former President, Unilever North America Just & In
Slide 44: Our Board is Independent, Engaged, Accountable
44 Our Board is Independent, Engaged, Accountable … Independent Engaged Accountable ▪ Independent Lead Director with clearly defined role and responsibilities ▪ All directors are independent, except for the CEO ▪ All 5 Board committees are fully independent ▪ Regular executive sessions of the indepe
Slide 45: Committed to Diversity and Adding New Perspectives
45 … And is Committed to Diversity and Adding New Perspectives … 45 balances continuity with fresh perspectives 3 of 5 committee chairs are women 45 Gender & Racial / Ethnic Diversity Range of Tenures <5 Years 5-10 Years 10+ Years 64 % of the board is diverse by gender or race / ethnicity 45 % gende
Slide 46: Ongoing and Thoughtful Board Refreshment
46 … With Ongoing and Thoughtful Board Refreshment 5 new independent directors added within the last 3 years ; 3 directors retired 2019 2020 2021 Ashok Vemuri Karen Hoguet Kevin Brown 46 Amanda Sourry Elaine Chao
Slide 47: Our Committee Charters are Aligned with Our Priorities
47 Our Committee Charters are Aligned with Our Priorities Chairperson / Members Board Committees Ronald L. Sargent (Chao, Gates, Moore) Corporate Governance Committee: corporate governance policies and procedures; Board refreshment; Board self - evaluation; shareholder engagement; committee function
Slide 48: Compensation Program Overview
48 Compensation program motivates value creation • Incentive opportunities aligned with market • Pay mix emphasizes pay - for - performance link • 91% of CEO’s and 83% of other NEO’s target pay is variable and at risk • Short - term performance metrics incentivize sales growth and operating profit,
Slide 49: Carl Icahn's Campaign is Not in the Best Interest of Shareholders
49 Carl Icahn’s Campaign is Not in the Best Interest of Shareholders 49
Slide 50: Carl Icahn Has Made No Attempt to Engage
50 Carl Icahn Has Made No Attempt to Engage … First and Only Outreach from Icahn Icahn makes first and only outreach to Kroger with a call to Rodney McMullen, Chairman and CEO, voicing his concerns regarding animal welfare and the use of gestation stalls in pork production and his intention to nomin
Slide 51: Icahn Has No Plan for Kroger
51 If Icahn’s candidates are elected, they would comprise almost 20% of Kroger’s Board, focused on a single matter — sow housing has made no attempt to engage with Kroger has no actionable ideas or suggestions on how to advance the sow housing transition has a rigid and overly prescriptive stance —
Slide 52: Icahn's Director Nominees are Not Additive or Qualified
52 Icahn’s Director Nominees are Not Additive or Qualified Margarita Paláu - Hernández Alexis C. Fox The Corporate Governance Committee of the Board interviewed and considered Ms. Paláu - Hernández’s qualifications, skills, and experience. The Board unanimously determined that Ms. Paláu - Hernández’
Slide 53: Our Strategic Execution, Corporate Governance, and Sustainability Policies Driving Value
53 Our Strategic Execution, Corporate Governance, and Sustainability Policies and Practices are Driving Value for All Stakeholders • As America’s grocer, Kroger is committed to delivering fresh and affordable food for everyone , supporting a sustainable food supply to feed America for generations to
Slide 54: Vote FOR ALL of Kroger's director nominees on the WHITE Proxy Card
54 Vote “FOR ALL” of Kroger’s director nominees on the WHITE Proxy Card Support Kroger’s strong, independent, and diverse Board to oversee Kroger’s continued momentum and achievement of ESG goals.
Slide 55: Appendix
55 Appendix
Slide 56: Strong Value Creation Model, Consistently Delivering Attractive TSR
56 Strong Value Creation Model, Consistently Delivering Attractive TSR Total Shareholder Return Over Time 56 Source: Bloomberg, Capital IQ, Company filings as of May 24, 2022 1. Total Shareholder Return (TSR) defined as share price performance plus impact of reinvested dividends. Last 5 Years reflec
Slide 57: Non-GAAP Reconciliation
57 NON - GAAP RECONCILIATION RECONCILIATION OF NON - GAAP MEASURES Adjusted FIFO Operating Profit: Management believes that adjusted FIFO operating profit is a useful metric to investors and a nal ysts because it presents more accurately year - over year comparisons for operating profit (loss) becau