Safeway is closing additional stores in 2026 as parent company Albertsons reassesses its retail footprint following the collapse of its proposed $24.6 billion merger with Kroger. At least three Safeway locations have already shuttered this year: stores in Hayward, California; Newport, Oregon; and Washington, D.C., according to company announcements and reporting from USA Today.
The closures mark a significant acceleration in store reductions. Albertsons closed 35 stores during fiscal 2025, more than triple the 10 it closed the previous year and up from eight in fiscal 2023, according to the company’s latest annual filing. The broader company ended fiscal 2025 with 2,244 locations across 35 states and Washington, D.C.
Albertsons had deliberately slowed its store-closure decisions while the Kroger transaction was pending. Once federal and state courts blocked the deal in December 2024, the company pivoted to what it called “portfolio optimization”—evaluating its store network, closing underperforming locations, and opening new stores in high-demand areas.
The Federal Trade Commission filed suit in February 2024 to block the merger, arguing it would eliminate competition between two major grocery chains, lead to higher prices for consumers, and weaken bargaining power for grocery workers. A federal judge in Oregon and a King County judge in Washington both granted preliminary injunctions blocking the transaction, and Kroger and Albertsons terminated their merger agreement in December 2024.
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 metric that excludes newly opened and closed stores. Full-year identical sales are expected to decline between 1.5% and 0.5%, well below the company’s earlier guidance of flat to up 1%.
In response to weakening sales and the failed merger, Albertsons launched a restructuring initiative called ACI Edge in July 2026. The plan consolidates the company’s 11 divisions into four regions and centralizes 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 restructuring is expected to generate approximately $200 million in incremental annual run-rate benefits. Albertsons also cut its full-year earnings guidance and adjusted EBITDA outlook downward, citing softer industry trends and a more cautious consumer environment. The company said it is working to place affected employees at other locations where possible.
Albertsons operates 22 grocery banners including Safeway, Vons, Jewel-Osco, and Acme. The company acquired Safeway in January 2015 for approximately $9.2 billion. The failed Kroger merger was meant to create a grocery powerhouse, but its collapse left Albertsons navigating a competitive landscape dominated by larger rivals like Walmart and Amazon.
Sources
- Fox Business — reported 35 store closures in fiscal 2025, specific Safeway locations closed in 2026, and Albertsons’ capital expenditures and remodeling activity
- ECIKS.org — confirmed Q1 fiscal 2026 identical sales decline of 0.8%, ACI Edge restructuring consolidating 11 divisions into 4 regions, and CEO Susan Morris’s restructuring goals
- USA Today — identified specific Safeway closure locations in Hayward, Newport, and Washington, D.C., and Albertsons’ employee placement efforts
- Federal Trade Commission — documented the February 2024 lawsuit challenging the merger on antitrust grounds
- Forbes — reported the December 2024 court blocks by federal and state judges and the FTC’s competition arguments
