Kroger cuts annual sales forecast as consumer spending sputters

U.S. consumer sentiment weakened in August, while retail sales unexpectedly declined in July for the first time in nine months, as middle- and lower-income households increasingly prioritize essentials and value purchases in the face of persistent inflation.

Second-quarter identical sales growth slowed to 0.2% from 3.4% a year ago, and missed estimates of 0.9% growth, according to data compiled by LSEG.

The company expects full-year identical sales without fuel to increase in the range of 0.2% to 0.8%, compared with its prior forecast of a 1% to 2% rise.

Kroger said its updated sales forecast includes a roughly 140-basis-point headwind from the Inflation Reduction Act, which lowered prescription drug prices for Medicare beneficiaries, impacting revenue at its pharmacies.

Sept. 11 (Reuters) - U.S. grocer Kroger cut its annual identical sales forecast on Friday, underscoring cautious consumer spending even in categories such as essentials amid growing macroeconomic uncertainty.

Shares of the company were down about 3% in premarket trading.