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Ryanair’s boss just said something travelers and investors should pay attention to.

At the airline’s annual general meeting in Dublin, chief executive Michael O’Leary warned that airfares could rise sharply next year if oil prices stay high.

For a company whose main selling point is cheaper seats, that change is worth monitoring.

The timing matters too. The comments land at a time when Ryanair’s U.S.-listed shares (RYAAY) are trading close to their lowest level in a year.

What O’Leary told shareholders about Ryanair airfares

O’Leary said fares should be modestly lower in the July-to-September quarter, but the December and March quarters remain unpredictable.

The problem is fuel.

“If oil prices remain high into next year, I think there will be a significant uplift in airfares, and we would hope to avoid that,” he said, according to CNBC.

Ryanair has guaranteed no extra fuel charges. Even so, O’Leary said fares may still rise if competitors raise prices first, Reuters reported.

How Ryanair makes money and why fuel costs matter so much

Ryanair is Europe’s largest low-cost airline. It sells cheap base fares and earns extra from seat choices and priority boarding.

That business model runs on high passenger volume and low operating costs. 

Fuel is one of its biggest expenses, so an increase in oil prices affects its profit.

Brent crude has now gone above $100 a barrel due to the U.S. and Iran conflict, and jet fuel has climbed to about $140 a barrel, according to Aviation Week.

Ryanair CEO Michael O’Leary warned of higher airfares in 2027 if oil prices stay elevated.NurPhoto / Getty Images

Why Ryanair is better protected than most rivals this winter

Ryanair went into this oil crisis with a strong hedge, which locks in fuel prices in advance.

O’Leary said the airline is “better hedged than almost any other airline in Europe.” 

Ryanair has secured 80% of its fuel needs up until the end of March 2027 at about $67 a barrel.

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The company has also locked in an additional 15% at $85 a barrel for the 2028 fiscal year, RTE reported.

That is well below today’s spot price. So Ryanair’s costs stay mostly predictable into next spring.

What the winter flight cuts and first-quarter profit drop reveal

Ryanair’s unhedged fuel has more than doubled in price, so it reduced winter flying to limit the damage.

The airline cut its full-year passenger target to 214 million from 216 million.

It expects the move to reduce winter losses by €70 million to €100 million, the Irish Times reported.

The strain of the profit squeeze was already showing. First-quarter profit after tax fell 34% to €538 million, even as traffic rose 6%, according to Aviation Week. 

In Q1, average fares dropped about 6%.

Why Ryanair thinks weaker airlines could struggle to survive

O’Leary said less-hedged rivals could struggle to keep capacity, or even survive the winter, if high fuel prices continue, AeroTime reported.

If some weaker carriers pull back or fail, Ryanair could pick up their passengers and rebuild pricing power once fuel calms down. 

Budget-focused travelers also tend to switch to cheaper airlines when money is tight.

What Ryanair investors should watch from here

RYAAY trades near $53, down about 26% year to date and close to its 52-week low of $53.14.

That’s well under its 52-week high of $74.24.

Still, Wall Street stays positive.

Key points for RYAAY investors

Analysts rate RYAAY a Strong Buy, with an average price target at $68.45.

Ryanair is hedged on 80% of fuel through March 2027 at about $67 a barrel.

Winter capacity cuts aim to save €70 million to €100 million.

Fares for the July to September quarter are set to be modestly lower year over year.

For now, winter pricing is unclear. But Ryanair’s fuel hedge and strong balance sheet leave it better placed than most peers.

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CME Group (CME) is suing its own regulator over a product that could threaten parts of its futures empire. But Bank of America (BAC) thinks the fight could do surprisingly well for derivatives exchanges, even if CME loses.

The dispute centers on perpetual futures, or perps. Perpetual contracts don’t expire, making them easy for traders to leverage exposure without rolling into new contracts.

The product has already launched internationally. Bank of America believes crypto perpetual trading will reach over $93 trillion in 2025, almost five times the size of the underlying crypto spot market.

Now, the Commodity Futures Trading Commission (CFTC) accepted KalshiEX’s bitcoin perpetual contract as a futures contract on May 29. The regulator also noted that it should evaluate perpetual products linked to other asset classes on a case-by-case basis.

Less than three weeks later, CME filed suit. Bank of America said CME might do well winning, losing, or just slowing down the regulatory process.

CME lawsuit creates an unusual win-win setup

CME sued the CFTC on June 18 to classify perpetual contracts as swaps, not futures.

This distinction is of considerable commercial importance. If CME wins, perps could be subject to swap-dealer registration, extra reporting requirements, business-conduct rules, and stricter margin standards, according to Bank of America. Such burdens could make it harder to offer the contracts and less attractive to traders.

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But losing might give Bank of America another edge, the bank says. CME has exclusive futures license agreements for key stock indexes such as the S&P 500, Nasdaq-100, and Russell 2000. If perps still count as futures, rivals may find it hard to create contracts directly linked to such indices.

Competitors may create their own benchmarks to rival them, but it will not necessarily be simple to lure liquidity away from existing indexes. Regulators might also be forced to reexamine their approval procedure by a procedural court order, holding up new products without firmly deciding whether perps are futures or swaps.

That’s why Bank of America says the setup is advantageous for CME in a few situations.

The bank doesn’t like the stock overall. This report rates CME Underperform with a $230 price target, compared to its Sept. 10 $274.70 share price. Instead of expecting perps to destroy CME’s business, its caution reflects valuation and slower expected earnings growth.

A $93 trillion market explains why exchanges are worried

The offshore market is why U.S. exchanges are taking the product seriously.

CoinGecko estimates centralized perpetual exchanges generated $86.2 trillion in 2025 trading volume, up 47.4% from the prior year. Decentralized perpetual exchanges added another $6.7 trillion, putting combined volume at roughly $92.9 trillion.

Their appeal is straightforward. Traditional futures expire and may be rolled forward, but options require strike prices and expiration dates. Active retail traders like perpetuals because they don’t expire and offer leverage.

That leverage is risky. A 10% move against a position in the underlying security with a 10-times leveraged trader might wipe out a margin position, according to Bank of America.

The main concern for exchange investors is whether the offering can leap from crypto to stocks. Bank of America sees bitcoin and equities as the best potential sources of U.S. retail demand.

CME’s legal gamble could reshape a fast-growing marketBloomberg / Getty Images

Cboe faces more risk, while ICE plays both sides

CBOE Global Markets (CBOE) might see further upheaval if perpetuals go into stocks, as retail has helped fuel growth in its options franchise.

Bank of America said there is some overlap between perpetual traders and users of S&P 500 zero-days-to-expiration, or 0DTE, options. Both provide significant leverage, but perps might be simpler for certain traders since there are no strike prices or expirations to choose.

But the bank believes investors overreacted when Cboe’s stock price plunged about 30% between May 15 and June 30. Options give nonlinear exposure and enable institutional hedging tactics that a basic perpetual contract cannot simply replace. Bank of America ranks Cboe Neutral with a $354 price target.

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Intercontinental Exchange (ICE) seems more insulated. Bank of America estimates that around 95% of ICE’s exchange income comes from institutional clients. Commodity and rates users generally want capabilities such as physical settlement, particular dates, and hedge-accounting treatment.

ICE has also positioned itself to gain if innovative trading mechanisms take off. The corporation invested in crypto platform OKX in March at a $25 billion value and stated the companies will work together on sectors like regulated crypto futures, clearing, and digital-asset infrastructure.

Bank of America therefore names ICE its top exchange pick, with a Buy rating and $232 price target.

Perpetual futures put CME in an unusual position

The U.S. perp market is still modest compared to offshore trade, and authorities have not yet allowed perps outside of crypto. That remains a serious question about whether the product will acquire major momentum in stocks and other conventional markets.

But not everyone shares the danger of competition equally. If stock perps take off, some of the speculative retail action could migrate to Cboe. ICE has a strong institutional client base, and investment in OKX gives it safety and possible upside.

CME is in the oddest situation. If it wins its case, tighter swap requirements might apply to perpetual goods. Should it lose, the exclusive index ties could protect some of its most valuable businesses. A protracted court battle might potentially delay rivals seeking clearance for new contracts.

Perpetual futures have previously shown that retail traders would choose a simpler leveraged instrument when given the opportunity. Whether they can duplicate that performance in U.S. stocks remains to be seen.

But Bank of America’s main point is refreshingly straightforward: CME doesn’t need to win in court to be the winner.

Related: Bank of America flags a $163B risk hanging over stocks

A San Francisco startup’s hydrogen retrofit cut fuel use 24% and emissions 28% on an 8,500-mile voyage—proof, its backers say, that ships don’t need to for cleaner fuel.

The New York Mets’ franchise legend offered a response on his former teammate after news of an Atlanta Braves blockbuster trade proposal.

Jim Cramer is no stranger to big predictions, and stock market investors navigating this choppy market need reasons to look beyond the next trading session. 

In his September 11 episode, the Mad Money host pointed to eerie similarities with 2018, when elevated interest rates helped turn a robust market into a painful sell-off. Despite that caution, Cramer sees Meta Platforms (META) stock potentially doubling over the next three to five years.

For Meta shareholders, that’s clearly a welcome change following a remarkably uneven stretch. Through September 11, shares jumped nearly 13% in September but remained 2% lower for 2026, according to Yahoo Finance data.

That said, the latest bounce gave investors something to work with. Meta jumped over 6% on September 9 after launching its Muse AI assistant, according to Yahoo Finance, which renewed interest in how the tech giant might turn AI into a bigger business.

Cramer, however, is looking beyond the initial enthusiasm surrounding that launch. His argument begins with what investors are paying for Meta stock today, then extends to opportunities that may take years to develop. 

That combo makes his bullish call worth looking at, especially against his cautious stock market outlook.

Jim Cramer says Meta stock could double over three to five yearsNoam Galai / Getty Images

Why Cramer sees Meta doubling

Cramer’s bull case starts with what investors are paying for Meta stock today.

“It sells at a very low multiple,” he said, suggesting the stock’s pricing leaves plenty of room for investors to reassess its potential. That said, he didn’t specify an earnings multiple or assign a dollar price target.

For perspective, Seeking Alpha data shows that Meta stock trades at 20.66 times forward adjusted earnings, around 6% below its five-year average of 22.04. Moreover, its forward adjusted PEG ratio, which layers in expected earnings growth, is 1.03, 32% below its historical average.

Cramer’s second argument centers around a potential obstacle that’s become a lot less threatening.

“It’s got a lot of the worries about those lawsuits away from it,” he said. Naturally, the reduced legal uncertainty helps investors focus on future profits, though the company isn’t in the clear when it comes to every regulatory overhang.

The big legal relief for the Facebook parent came on August 26, when it agreed to settlements worth nearly $18 billion over state claims involving children’s social media addiction and privacy, Reuters reported.

Moreover, these agreements also addressed participating states’ Cambridge Analytica claims, which lowered the uncertainty around two major longstanding disputes. 

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Then Cramer talked about the tremendous growth opportunity.

“I think they’ve got a lot of things in the works for small business,” Cramer said, also highlighting personal assistants. Moreover, execution puts it all together with Cramer praising Meta’s “really brilliant CEO”, underscoring confidence in the leadership’s ability to develop those opportunities.

Put simply, considering an undemanding valuation, fewer legal obstacles and room for new growth, Cramer feels the stock could double over the three to five years for those willing to stomach the risk.

Cramer puts AMD stock among his top picks

Cramer’s enthusiasm stretched to Advanced Micro Devices (AMD) stock, grouping it along with Dell Technologies (DELL) as “the two best stocks in this market”.

His endorsement came after the caller compared AMD’s dollar gains with Nvidia’s (NVDA), asking whether to buy. 

That comparison points to bigger dollar moves; that doesn’t necessarily mean a healthier percentage return, as share prices differ.

Nevertheless, Cramer came with an unequivocal answer.

“AMD’s fantastic stuff. Fantastic company,” he said, before praising its leadership and adding: “Buy it. End of story.”

His frustration was that his own portfolio didn’t follow that conviction.

“I couldn’t; I wasn’t able to pull the trigger because of my restrictions,” he explained, referring to AMD and Dell. 

Both stocks have killed it this year, with AMD rising over 141% year-to-date, while Dell stock has surged 351% over the same period, with Dell in particular trading at just 2.4 times trailing twelve-month sales, according to Seeking Alpha data.

Nevertheless, the exchange offered no earnings forecast, price targets, or valuation analysis. Also, the broader context is that Cramer remains worried about a potential market pullback and wants cash available to buy into the weakness. 

His bullishness over AMD, though, suggests confidence that the company can continue co-existing with caution about when and how aggressively to invest. 

What Meta investors should watch next

Cramer’s Meta thesis ultimately depends on earnings growth and what investors will pay for it.

A relatively modest discount to historical valuations helps, but doubling entails substantial business progress, an elevated multiple, or both.

One of the big questions is if new AI products can generate added profit to justify their costs. Adoption alone won’t answer that, as investors need to watch monetization, operating margins, and cash generation as those offerings develop.

Legal settlements improve on that visibility, but their payments and product changes still matter a ton. Less uncertainty doesn’t automatically translate into higher earnings, though. 

That said, the practical takeaway is to efficiently test the business case, continue preserving flexibility and avoid treating either endorsement as protection against losses.

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Every published price forecast is really two forecasts stacked on top of each other.

There is the number the bank puts in the headline, and there is the quiet assumption underneath it about how the world actually travels from here to there.

The number gets quoted on television and pasted into client decks. The assumption gets ignored until the day it breaks, and then it turns out the assumption was the entire forecast.

Oil traders have spent roughly six months relearning that lesson at full price. Brent crude sat near $70 a barrel before the war with Iran began in late February. Diesel was $3.76 a gallon.

Neither number survived the year. The national diesel average crossed $6 a gallon on Friday, Sept. 11, for the first time on record, while regular gasoline now sits at $4.29, according to AAA data reported by NBC News.

Markets have absorbed one revised bank forecast after another since March, each arriving with the same confident framing and a different number attached.

Into that market, HSBC published a revision this week that nearly every outlet reduced to a single figure. The bank now sees Brent averaging $90 a barrel in 2026, up from $80.

That figure is the least interesting thing in the note.

HSBC lifts its 2026 Brent call to $90 and 2027 to $85.matejmo / Getty Images

Why HSBC lifted its Brent forecast to $90

HSBC raised its 2026 Brent forecast to $90 from $80, its 2027 forecast to $85 from $65, and set a longer-term assumption of $75 from 2028 onward, according to OilPrice.com.

Senior oil analyst Kim Fustier wrote that oil markets are unlikely to rebalance until the middle of 2027.

That rebalancing date is the actual news. Nine more months of a structurally tight market is a very different economic event from a price spike that fades by Christmas.

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One detail complicates the headline, though. The $90 call sits well below where Brent trades today. Front-month Brent fell 3.58% to $103.78 a barrel on Sept. 11 after peaking near $108 on Sept. 10, reported CNBC.

So the raised forecast doubles as a quiet bet that this week’s spike does not hold as an annual average.

What the Hormuz bypass pipelines actually carry

HSBC’s base case assumes a fragile understanding between Washington and Tehran holds well enough for Hormuz liquids flows to climb from about 6 million barrels a day now to 8 million by year-end, then 9.5 million by mid-2027, still far below the 19 million to 20 million moving before the conflict, according to InvestingLive.

The other half of that arithmetic almost never makes the headline. HSBC expects flows through Saudi and UAE bypass pipelines to rise from just over 4 million barrels a day to 6.8 million by mid-2027, lifting total Gulf export volumes to roughly 16.5 million barrels a day.

That is the assumption sitting underneath the $90.

Thursday tested it. Satellite imagery showed a black smoke plume tracing the route of Saudi Arabia’s East-West oil pipeline in the desert between Medina and Mahd adh Dhahab, with NASA thermal detections clustered along the same stretch, reported Newsweek.

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The line, known as Petroline, runs roughly 1,200 kilometers from the Eastern Province to Yanbu on the Red Sea and has become the kingdom’s most important route for moving crude without touching Hormuz, according to Gulf News. Saudi authorities have not confirmed a strike, and Aramco has not commented.

When I ran HSBC’s bypass assumption against what that system has already been asked to carry, the margin looked thin. Saudi Arabia leaned on the East-West line for as much as 7 million barrels a day at the peak of the disruption earlier this year. HSBC now needs Saudi and UAE lines combined to deliver 6.8 million by mid-2027, from a pipeline network that just lit up on infrared.

The 6 million barrel gap nobody has closed

Here is the part of this story that should unsettle anyone pricing energy risk. The market cannot agree on how much oil is currently moving through the strait.

HSBC puts current Hormuz liquids flows near 6 million barrels a day, about 30% of pre-conflict levels, according to OilPrice.com.

Tracking data cited by rival desks put the figure closer to 10 million barrels a day of crude and refined products, according to IndexBox.

Saudi crude production itself fell to 6.24 million barrels a day in August, per OPEC data reported by Gulf News.

My analysis of those three figures keeps landing in the same uncomfortable place. A forecast built on the low estimate describes a far tighter market than one built on the high estimate, and HSBC built on the low one.

That is not a knock on the bank. It is a warning about false precision. When the input range on the single most important variable in the market is that wide, a $90 base case and a $120 stalemate case are much closer together than the gap between them suggests.

Part of the divergence is mechanical. Flow trackers count tankers broadcasting their positions, and vessels moving through a contested waterway have every reason to stop broadcasting. Every barrel that goes dark widens the spread between what the desks report and what the market actually receives.

Investors should treat any single Hormuz throughput figure the way they would treat a lone analyst estimate on a thinly covered stock.

What higher for longer oil costs you at the pump

The consumer math has already run ahead of the forecast math.

The national diesel average hit $6.05 a gallon on Friday, up from $5.85 the week before and $3.70 a year ago, according to AAA figures reported by NPR. That is a jump of roughly 60% since the war started.

Diesel is the price most drivers never check and every shopper eventually pays.

“The cost of diesel gets into just about everything,” said KPMG chief economist Diane Swonk, according to NBC News.

“Record diesel prices will impact every cargo, shipment, every delivery Americans are taking,” said Patrick De Haan, head of petroleum analysis at GasBuddy, according to WTHR.

So the number worth writing down from HSBC’s note is not $90. It is mid-2027.

That is the date the bank believes this market stops being an emergency, and the date rests entirely on Gulf pipelines carrying crude around Hormuz without interruption for another 21 months. On Thursday, one of those pipelines was throwing a smoke plume nearly 100 kilometers long across the Saudi desert.

I have covered five bank revisions on this crisis since March, and the pattern in every one of them has been the same. The price target moves, the market reacts for a day, and the assumption underneath the target quietly does all the work.

The bypass lines are the variable worth watching now. The barrel price is just the readout.

Related: Morgan Stanley changes its oil forecast for the rest of 2026

U.S. stock funds just posted their largest outflows since January. Treasury yields are at a 19-year high. Oil is above $100. And yet markets are barely moving. Bank of America says that calm is the problem.

Strategists Jared Woodard and Michael Hartnett published a note warning that investors and policymakers are both being too relaxed about risks that are building fast, Bloomberg reported.

What the fund flow numbers show

U.S. equity funds shed $14.2 billion over the past three weeks, the largest outflow since January, according to BofA citing EPFR Global data. Global stock funds are also pulling back, now averaging $7 billion a week after pulling in $52 billion weekly as recently as July. Investors are moving money out, and the shift happened fast.

Where is the money going?

Investment-grade bonds just recorded their 23rd straight week of inflows at $5 billion. Government and Treasury funds posted their 11th consecutive week of inflows at $6.6 billion. Investors are not leaving financial markets. They are moving to safer parts of it.

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Tech stocks are bucking the trend. Technology sector funds took in $2.2 billion last week, leading all sectors on the inflow side.

That says investors are still willing to pay up for AI-exposed names even as they trim broader U.S. equity exposure, as TheStreet reported.

China equities also saw their first inflow in six weeks at $1.1 billion.

Materials funds extended a 10-week inflow streak at $1.9 billion. The pattern suggests money is rotating rather than retreating. Investors are not running from markets. They are repositioning inside them.

Why BofA says the calm is a warning sign

“Markets stop panicking when policymakers start panicking, but no panic anywhere despite the highest 30-year yield since June 2007 and spiking commodities,” Woodard and Hartnett wrote in the note.

They went further. “Blasé markets and bravado policy are a recipe for volatility,” the strategists added.

BofA’s argument is that the absence of fear right now is itself a risk. When markets shrug off a 19-year high in the 30-year Treasury yield and oil crossing $100, it usually means investors are not taking those signals seriously. That tends to set up sharper moves when the risks eventually show up in prices.

The 30-year yield is the one Woodard and Hartnett are most focused on. Higher long-term yields raise borrowing costs for companies, cut the present value of future earnings, and make bonds look more attractive than stocks. That combination usually pressures equities, especially growth stocks priced on earnings that are years away.

BofA’s Bull and Bear Indicator, which tracks positioning and sentiment across asset classes, has been flashing a sell signal since May 2026, according to Investing.com. It hit 9.7 out of 10 in early August, its highest reading since 2021.

BofA’s argument is that the absence of fear right now is itself a risk.Xinhua News Agency / Getty Images

How AI spending fits into the risk picture

The BofA strategists also flagged the AI spending debate as an unresolved risk. Roughly $1.5 trillion has been invested in AI over the past three years, yet there is little evidence of economy-wide productivity gains, Bloomberg reported.

Total factor productivity is actually falling below trend rather than rising, a measure BofA says has been closely correlated with consumer confidence for the past 50 years.

The concern is not that AI is failing. It is that the market may have already priced in productivity gains that have not shown up yet. If those gains take longer to materialize, or if companies pull back on AI investment before they do, sectors that rode the AI boom could face significant pressure.

Oil above $100 a barrel is doing more than stoking inflation fears. It is also feeding into the political environment heading into November midterms.

Markets historically see elevated volatility in the weeks surrounding major political events. With Treasury yields at a 19-year high and oil already elevated, any added jolt from election uncertainty arrives into a market with limited cushion.

Higher diesel prices meanwhile are working through the economy at multiple levels. Trucking, farming, food distribution and package delivery all run on diesel. A record $6.05 per gallon nationwide as of September 11 means those costs are being felt across supply chains in ways that tend to show up in inflation data one to two months later.

What BofA says investors should pay attention to right now

The strategists pointed to the gap between what consumers are experiencing and what markets are pricing. Energy prices affect almost every household directly. Higher fuel costs reduce what families can spend on other things. Rising mortgage rates tied to the long bond are already pricing buyers out of housing in many markets.

BofA wrote that “sometimes Main Street knows what Wall Street doesn’t,” Bloomberg reported, suggesting that if consumer confidence keeps eroding, it will eventually show up in spending, earnings and stock prices even if markets are slow to react.

Treasury yields are the most direct number to watch. If the 30-year stays elevated or climbs further, the pressure on equities builds. If policymakers do something to bring it down, the threat recedes. Investors who are not thinking about the long bond are probably not thinking about the right thing.

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Kroger is facing mounting pressure from shifting customer habits, causing it to lose $12 billion as competition intensifies.

In recent months, the grocery chain, which operates regional supermarkets such as Ralphs, Fred Meyer, and Smith’s, has grown laser–focused on attracting and retaining price-conscious customers by offering more value and lower prices in its stores. 

For example, it began offering extra savings on gas in March and refreshed its loyalty rewards program to include more simplified offers. In May, Kroger CEO Greg Foran confirmed plans to cut prices on thousands of items in its stores, a move that takes on Walmart, Costco, and other retailers emphasizing lower prices. 

“The reality is, the basket has to come down,” said Foran in a Bloomberg report in May. “It needs to be across thousands of products, and it has to be something that passes the commonsense piece with customers.”

Kroger loses $12 billion in customer spending to rivals

Despite these efforts to keep customers away from rivals, Kroger has lost more than $12 billion in CPG (consumer packaged goods) spending to Amazon, Walmart, and Costco over the past year, according to a recent Numerator report.

Specifically, CPG spending at Kroger and Ralphs stores declined by $715 million and $516 million, respectively, as customers made 9 million and 5.5 million fewer trips than they did a year ago. Kroger incurred direct losses of more than $1 billion as a result of these shifts.

The retailer also added more than 1 million high-income households over the past year, but lost 700,000 lower-income households. 

Related: Kroger drops new offer for customers as grocery prices climb

Lower-income Kroger shoppers pulled back their CPG spending by 5.2% year over year as they made 30 million fewer trips. The report notes that “low-income households are creating a $1B spending gap for Kroger.”

It also states that customer spending on grocery staples such as canned goods, beverages, and candy has increased by $800 million over the past year, while household items such as laundry, cleaning, and dishwashing supplies dropped by $97 million. Spending on health and beauty products was also down $178 million. 

However, Kroger’s private-label brands across its fresh foods have become a source of growth, as customer spending in this area spiked by $420 million in the past year.

Kroger has reportedly lost more than $12 billion in CPG spending to several top competitors over the past year.RiverNorthPhotography / Getty Images

Kroger CEO reveals why customers are tightening their spending 

Regarding this shift in customer behavior, Foran warned on an earnings call on Sept. 11 that Kroger customers continue to grow more cautious about their spending amid economic uncertainty. 

“Customers remained under pressure, and that has affected the industry broadly. Unit growth has slowed since the start of the year,” said Foran. “Reductions in SNAP benefits, higher fuel prices, and softer consumer confidence are all putting pressure on household budgets. Customers are buying more on need.”

He said the consumer environment is getting “a little bit tighter” as shoppers grow more disciplined with how they spend their dollars. 

“I would say that what we are seeing is the consumer continues to be disciplined,” he said. “They are not absent. They are turning up to the stores, but they are pretty disciplined about what they buy.”

In the second quarter of 2026, Kroger saw its identical sales without fuel increase 0.2% year over year, according to its most recent earnings report. 

Recent Placer.ai data also found that customer visits to Kroger stores ticked up 0.5% year over year during the quarter. 

Kroger invests in private label and organic to win over customers

Kroger Chief Financial Officer David Kennerley said on the call that “sales were softer” than the company expected during the quarter. 

As sales grew slowly, Foran confirmed that Kroger’s private-label brands, such as Private Selection and Simple Truth, saw higher demand during the quarter, indicating that consumers are seeking lower price points and more value.

“Private Selection sales increased more than 14% during the quarter, driven by strong customer response to new products, including more ready-to-heat and ready-to-eat meals,” said Foran. “Across the portfolio, our brand sales grew faster than national brands.”

In response to this shift in customer behavior, Foran said Kroger is expanding its low-price-point brand, Smart Way, by adding more items and improving visibility in stores and online.  

Foran also revealed that customers continue to “prioritize their health,” despite cutting back on discretionary spending, another trend Kroger is also further leaning into to boost sales. 

“We continue to see strong engagement in natural and organic, and we’re responding by expanding the assortment across the store,” he said. 

Foran said Kroger has doubled down on offering affordability during the quarter by working with suppliers and reinvesting cost savings and tariff refunds to offer customers lower prices. 

“Customers have choices, and it is up to us to provide them with that choice,” he said. 

Kroger shares a weaker sales outlook for 2026

As Kroger continues to navigate macroeconomic challenges, it has cut its full-year 2026 sales outlook. 

Kroger now expects its identical sales (excluding fuel) to grow between 0.2% and 0.8%, down from its previous expectation of 1% to 2% growth.

“I would expect that the pressure is actually going to mount, and we’ve seen a little bit more in Q2 (second quarter of 2026) than what we saw in Q1 (first quarter of 2026),” said Foran. 

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The move comes after Evercore ISI analyst Michael Montani warned in a Reuters report in July that “industry trends and competition remain challenging for Kroger.”

The bleak sales outlook comes at a time when consumer sentiment continues to drop nationwide. 

According to the University of Michigan’s Survey of Consumers data, consumer sentiment dropped 4 index points in preliminary results for September. 

“With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come,” said Joanne Hsu, a University of Michigan economist and director of the Surveys of Consumers, in a statement.

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