When Kroger and Albertsons called off their $24.6 billion merger in late 2024 after a federal judge blocked the deal, Albertsons was left in the worst possible position: a company that had spent two years planning to be acquired suddenly had to figure out how to survive on its own.
Eighteen months later, the answer is becoming clear. Albertsons is shrinking.
The grocery chain — which operates under banners including Safeway, Vons, Jewel-Osco, and Shaw's — has been steadily closing stores and laying off workers since early 2025. The latest wave, disclosed through WARN Act filings in March, puts a finer point on the strategy: nearly 300 employees across multiple states are losing their jobs as underperforming locations are shuttered.
The Latest Closures
The specifics paint a picture of a national footprint under pressure from every direction:
In Texas, Albertsons notified employees on March 9 that it would close stores in Euless and Fort Worth, with 138 combined layoffs effective April 25. The North Texas closures follow a pattern of Albertsons retreating from markets where H-E-B and Walmart dominate — a competitive reality that the merger with Kroger was supposed to address.
In California, the company's Vons banner is pulling back. A Vons in Escondido will close by May 1, affecting 65 employees. A Redlands location shuttered on March 19, impacting 70 workers. California was once Albertsons' stronghold; the Vons and Safeway banners were synonymous with West Coast grocery shopping. That era is fading.
In Washington, D.C., a Safeway on Maryland Avenue NE will permanently close by May 16, with 87 employees affected and the pharmacy shutting down on April 1.
These are not isolated incidents. Albertsons closed roughly 20 stores in 2025, and the pace appears to be accelerating in 2026.
The $1.5 Billion Question
Albertsons announced in early 2025 that it would cut $1.5 billion in expenses by 2027, focusing on selling, general, and administrative costs. Store closures are the most visible part of that effort, but they're not the only lever. The company is also investing in digital sales, automation, and AI — reporting significant e-commerce growth even as its physical footprint contracts. The tension is clear: Albertsons needs to cut costs to survive independently, but every store closure means lost market share in an industry where physical proximity still matters. A customer who loses their neighborhood Safeway doesn't sit at home waiting for Albertsons to build a better app. They walk into the Walmart or Aldi that just opened down the street.
A Competitive Landscape That Won't Wait
The timing couldn't be worse. While Albertsons retreats, its competitors are expanding aggressively. As we've reported, Aldi has entered its 40th state and is on pace to reach 3,200 U.S. stores. Walmart is remodeling hundreds of Neighborhood Markets. H-E-B continues to push into North Texas — the exact market where Albertsons is now closing stores.
And then there's the discount factor. In an environment where consumer sentiment has plunged to multi-year lows and shoppers are trading down aggressively, Albertsons' conventional supermarket model faces a structural disadvantage against value-oriented competitors.
The company is not on the brink of failure — it still operates more than 2,200 stores across 34 states and generates over $70 billion in annual revenue. But the trajectory is unmistakable. Albertsons is getting smaller, and the question is whether the stores that remain can generate enough volume and margin to fund the digital and operational investments the company needs to stay competitive.
The Kroger merger was supposed to solve this problem at scale. Without it, Albertsons is solving it one closure at a time.