Considering that Kroger (NYSE:KR) generates well over $100 billion in annual sales, its stock has been unusually volatile lately. Shareholders have seen share price losses – and gains – approaching 20% so far in 2018 as Wall Street tries to judge how much the supermarket chain's strengths will be challenged in the new multichannel retailing environment.

Its recent earnings reports have featured mostly bad news on the headline metrics of sales growth and profitability. However, CEO Rodney McMullen and his team say the next few announcements should demonstrate that Kroger's rebound plan is working. When its fiscal third-quarter report arrives before the market opens on Dec. 6, we will see just how much progress has been made on that score. Here are some key metrics to watch.

Filling the aisles

Kroger's 10-year unbroken streak of quarterly comparable-store sales growth ended with a slip into negative territory in late 2016 and early 2017. The good news is that the retailer has returned to delivering steady comps growth in each of the last five quarters.

A customer shops for groceries.

Image source: Getty Images.

However, that growth hasn't kept pace with the broader market or with Kroger's peers. Its comp growth was below 2% in the fiscal second quarter, while Walmart's achieved a 4.5% gain in its U.S. locations. What's worse, Walmart highlighted its grocery business as a standout performer, which underscores the fact that Kroger has been losing ground to its chief rival.

Kroger executives said its comps expansion last quarter was held back by early moves in their rebound plan, among them resetting shelves and slashing prices. These initiatives should start paying off as early as this quarter, and the best way to judge their effectiveness will be to follow sales growth.

Making money

Kroger's management team has made no secret of the fact that they're willing to sacrifice some short-term profitability in exchange for winning a larger base of loyal customers. "We will not lose on price," McMullen stated in 2017.

That price leadership goal is similar to the ones that Walmart and Target have articulated, but Kroger's profitability has declined more significantly than that of those peers lately. Moreover, its aggressive pricing stance hasn't yet sparked a rebound in customer traffic like it did for Target, which recently hit a 10-year high on that key metric.

KR Operating Margin (TTM) Chart

KR Operating Margin (TTM) data by YCharts

Given the success other retailers have had in boosting sales while holding prices steady, it would be reasonable for investors to expect to see the country's biggest supermarket chain display evidence of having the same kind of operating strength. That's why shareholders should be looking for operating margin to at least stabilize after dropping from 3.5% of sales in early 2016 to around 2% of sales recently.

Keeping up with peers

With a few days of sales data from peak holiday season shopping on the books, Kroger should be in a good position to estimate where its sales and profits will land for the full year. Its operating income figure -- like those of Walmart and Target -- is expected to decline due to investments in expensive growth initiatives like home delivery.

The key number to watch will be sales growth, since Kroger left its prediction on that metric unchanged back in September at about 2%. Walmart, Target, and Costco are all expanding sales at twice that pace or better, so a simple affirmation of its outlook would mean that Kroger hasn't yet found a way to end its stubborn market-share slide.

Demitrios Kalogeropoulos owns shares of Costco Wholesale. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.