As a kid, back in the 1980s, my family did its grocery shopping at the Star Market in our town. That wasn’t as much a choice as it was really the only option.
There were some specialty markets like butchers and a store that just sold fruit and vegetables, but we didn’t have a Target, Walmart, Costco, or any other major store. Amazon hadn’t been invented yet, so that wasn’t an option, and while there were some fancier chains in neighboring towns, we rarely shopped at them.
Now, local players still enjoy a geographic advantage — being the closest store to the consumers still matters — but the competition has become intense.
“Consumers are no longer shopping one way for all needs but splitting trips across value stock-ups, fresh and prepared-food occasions, convenience-led delivery, wellness-driven baskets, and fill-in missions,” according to McKinsey’s The State of Grocery North America 2026.
Regional chains, even very large ones like Albertsons, now compete with Walmart, Target, Amazon, Costco, Trader Joe’s, Aldi, and many more. They can’t offer the lowest prices because even as big as they are, they lack the buying power of Walmart, Amazon, and Costco, so they must find other ways to compete.
In some markets, that means closing stores when they simply can’t make money. That’s a painful reality Albertsons CEO Susan Morris shared during her chain’s first-quarter earnings call.
Albertsons has struggled
Albertsons had a mixed first quarter. It was a profitable quarter, but same-store sales did drop.
- Same-store sales decreased 0.8%
- Digital sales increased 13%
- Net income of $85 million, or $0.17 per share
“In the first quarter, our digital and pharmacy businesses continued to deliver strong growth, while core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer,” Morris said in the Q1 earnings release.
Albertsons also shared major changes in its operating structure. Called, ACI Edge, it’s “an operating structure realignment designed to accelerate execution, increase accountability and more effectively leverage its scale.
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As part of the realignment, the company consolidated its 11 divisions into four regions and fully centralized center-store merchandising under a single enterprise team.
“The new regional structure is intended to support faster decision-making and stronger local execution, while the centralization of center-store merchandising brings category management, supplier relationships and merchandising strategy together to strengthen supplier partnerships, improve consistency across banners and regions and better leverage enterprise scale,” it added.
Albertsons has an answer on store closures
Albertsons closed around 30 stores in 2025 and more closures are planned for 2026, but the chain considers shutting down a location a last option.
Morris made it clear that only unprofitable stores will be closed.
“Unprofitable stores is a very, very small number. And outside of the period during the merger process, our hygiene is very rigorous,” she said during the first-quarter earnings call.
The chain has no plan for mass closures, but it will be shutting down more locations.
“We’re continually looking at our store base and making decisions on whether to keep the stores or can we turn them around, can we change the profitability or making the difficult decisions from time to time to exit those stores. And we’ve not seen a dramatic shift or increase in store profitability at this time. Again, it’s a pretty small number of our fleet,” she added.
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Some recent Albertsons store closures so far
- Washington, D.C. (Georgetown): The Safeway at 1855 Wisconsin Ave. NW closed in January 2026 after the company said the location was underperforming.
- Hayward, Calif.: The Safeway at 2600 W. Tennyson Road closed in early 2026 after serving the community for decades, with local officials raising concerns about reduced grocery access.
- Seattle, Wash. (Rainier Beach): The Safeway at 9262 Rainier Ave. S. closed in 2026, leaving residents without a full-service grocery store in the neighborhood.
- Dallas, Texas: The Tom Thumb at 5809 E. Lovers Lane closed in April 2026, eliminating roughly 70 jobs.
- Plano, Texas: The Tom Thumb at 2200 14th St. closed in April 2026 as part of Albertsons’ ongoing store rationalization.
- San Diego, Calif. (Clairemont): The Vons at 6155 El Cajon Blvd. was among the Southern California stores slated to close during Albertsons’ 2026 footprint review.
- Mission Viejo, Calif.: A Pavilions location was shuttered in 2026 as the company continued evaluating underperforming stores across Southern California.
- Portland, Ore.: A Safeway location closed in 2026 as part of the company’s broader effort to trim lower-performing stores following the failed Kroger merger.
Source: Fast Company
Regional grocery chains face a pricing problem
Regional grocery chains generally charge higher prices than warehouse clubs and discount grocers. A Consumer Reports study, which used Walmart as the baseline, showed that Albertsons prices are 24.8% higher than that baseline.
The study compared a basket of commonly purchased grocery items.
That means that the chain has to find ways to compete that are not fully based on price.
Kroger’s CEO Greg Foran addressed the price gap between his chain and rivals like Walmart and Costco during his company’s first-quarter earnings call.
“We do not need to be the lowest-priced retailer. We need to be more competitive, more consistent and easier for customers to understand. When a customer is deciding where to shop, we want more of them choosing Kroger more often because the value is clear, the experience is great and the trust is there,” he said.
Morris also spoke about price and she also acknowledged that Albertsons can’t be the cheapest. She did, however, say that the chain needs to invest in lower prices.
“It’s really just about sharpening, specifically at the customer level and at the market level, both again through frontline pricing, but also through personalization,” she said.
Morris also believe that Albertsons can grow its private label sales.
“We’ve shared our aspiration of hitting 30% penetration, and we’re more convicted than ever in that goal, especially at a time where our team has been doing a phenomenal job of leveraging down the costs on our private label products and our own brand products, therefore, allowing us to be able to sharpen price points,” she added.
RTM Nexus CEO Dominick Miserandino thinks that Albertsons, and other regional grocery chains, face a challenging road.
“Consumers are more price-conscious than ever, competition is coming from every direction. Now you have players like Walmart and Amazon upping their subscription model game. Retailers have to invest simultaneously in pricing, technology, labor, and e-commerce and with tighter margins that’s not easy,” he said.
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