Safeway is closing more stores as its parent company Albertsons works to restructure operations following the failed $24.6 billion merger with Kroger, according to a statement from Albertsons on August 14.
At least three Safeway locations have already closed in 2026: stores in Hayward, California; Newport, Oregon; and Washington, D.C., according to USA Today. Albertsons said it is attempting to place affected employees at other locations where possible.
The closures are part of Albertsons’ broader effort to evaluate and optimize its store network, the company stated. “Albertsons Companies, which includes Safeway, continually evaluates its store network to ensure we are best positioned for the future,” Albertsons said in its announcement.
The Kroger-Albertsons merger collapsed in December 2024 after federal and state courts blocked the deal on antitrust grounds. The Federal Trade Commission had filed suit in February 2024, alleging the merger would eliminate competition, raise grocery prices, and harm workers. A federal judge in Oregon and a King County judge in Washington both blocked the transaction.
Before the merger attempt fell through, Albertsons said it had “slowed potential portfolio optimization” — deferring store-closure decisions while negotiations continued. Once courts blocked the deal, the company pivoted, closing underperforming locations and opening new stores in high-demand areas.
The store closures reflect mounting pressure on Albertsons’ core business. In its first quarter of fiscal 2026, the company reported a 0.8% decline in identical grocery sales — a key retail metric that excludes newly opened and closed stores — according to an announcement in late July. Identical sales are expected to decline between 1.5% and 0.5% for the full year, well below the company’s earlier guidance of flat to up 1%.
In response, Albertsons launched a restructuring initiative called ACI Edge in July, consolidating its 11 divisions into four regions and centralizing merchandising decisions. CEO Susan Morris said the moves are designed to “speed up decision-making, improve supplier relationships and drive more consistent execution across the company’s store banners.” The company also cut its full-year earnings guidance and adjusted EBITDA outlook downward, citing softer industry trends and a more cautious consumer environment.
The restructuring marks a significant shift for Albertsons, which operates multiple grocery banners including Safeway, Vons, Jewel-Osco, and Acme. Albertsons acquired Safeway in January 2015 for approximately $9.2 billion, and the two chains have operated as part of the same parent company for over a decade. The failed Kroger merger was meant to create a grocery powerhouse, but its collapse left Albertsons to navigate a competitive landscape dominated by larger rivals like Walmart and Amazon.
Sources
- USA Today — confirmed Safeway store closures in Hayward, Newport, and Washington, D.C.; detailed the failed Kroger merger and court blocks
- Idaho Business Review — reported Albertsons’ Q1 identical sales decline of 0.8%, guidance cuts, and ACI Edge restructuring consolidating 11 divisions into 4 regions
- Multiple outlets — confirmed the $24.6 billion Kroger-Albertsons merger was blocked by federal and state courts in December 2024
