Albertsons store closures accelerate after Kroger merger collapse

The store-closure program Albertsons Companies (ACI) put on hold during its $24.6 billion Kroger deal has moved quickly since that deal collapsed. Thirty-five locations closed in fiscal 2025, more than triple the prior year's ten and up from eight in fiscal 2023, per Albertsons' latest annual filing. The litigation over Albertsons' $600 million termination-fee claim against Kroger is the next item in focus for the setup.

Footprint contraction and its cost

Net of nine new store openings, those closures pulled $63.4 million from fiscal 2025 sales. Costs tied to shuttered locations and surplus properties climbed to $45.1 million from $15.9 million the prior year, a gap that shows stranded capacity carries a real price tag even after the doors close. Albertsons told USA Today it had slowed what it called "portfolio optimization" while the Kroger transaction was pending, then resumed the evaluation after U.S. District Court for the District of Oregon blocked the merger on Dec. 10, 2024. The FTC brought that challenge alongside nine state attorneys general.

Named 2026 Safeway closures include stores at 231 W. Jackson St. in Hayward, California; 2220 N. Coast Highway in Newport, Oregon; and 1601 Maryland Ave. in Washington, D.C. The company declined to provide a full list of planned closures. Albertsons said it is working to place affected employees in jobs at other stores. Its workforce stood at approximately 280,000 as of Feb. 28, 2026.

Capital still moving into the remaining base

Exits ran alongside investment elsewhere in the store network. Albertsons completed 94 remodels and deployed approximately $1.83 billion in capital expenditures during fiscal 2025, covering physical store improvements and digital and technology platforms. The company operates 22 banners, including Safeway, Vons, Jewel-Osco, ACME, Shaw's, and Tom Thumb, and ended fiscal 2025 with 2,244 locations across 35 states and Washington D.C. The merger with Kroger, announced in 2022, would have created one of the country's largest grocery companies before the FTC sued to block it on competition grounds.

What to watch

The active watch item is the termination-fee dispute. Albertsons is seeking $600 million from Kroger. Kroger has filed counterclaims in Delaware, disputing that it owes the payment and accusing Albertsons of undermining the regulatory process. Albertsons has disputed that account. A ruling or settlement out of Delaware is the next hard number for the setup.