Albertsons is going through a challenging period. The supermarket company recorded negative comparable-store sales growth and flat overall sales during its most recent quarter, and it has lowered expectations for its financial performance for the rest of fiscal 2026.
The company posted strong e-commerce growth during the first quarter, and its pharmacy business also moved ahead, but those segments’ performance wasn’t enough to overcome the headwinds that held back the company’s overall results.
To combat that trend, Albertsons announced last week that it has implemented a broad restructuring plan that includes placing its stores into fewer groups and centralizing center store merchandising. The company is also accelerating efforts to save money as it looks for ways to lower costs and hold onto shoppers — especially lower-income consumers, who CEO Susan Morris said it is losing to rival grocery retailers like Walmart and Amazon.
Here are several takeaways about Albertsons’ recent performance and its path forward based on information Morris and outgoing President and CFO Sharon McCollam shared on Thursday during the grocer’s first-quarter earnings call.
Digital sales turned profitable — but they’re losing momentum
Morris noted during the call that Albertsons’ digital operations turned a profit for the first time during the first quarter, an achievement she attributed to higher order density, improved fulfillment operations and stronger customer engagement.
“This milestone demonstrates that we are successfully growing digital sales while improving the underlying economics of the platform and creating a business that can generate profitable growth over time,” she said.
But while Albertsons’ online sales were profitable from an accounting standpoint during the quarter, their growth rate has steadily subsided. The company’s e-commerce sales grew at a 13% clip during the first quarter of fiscal 2026, down from 16% in the final quarter of the prior fiscal year. Albertsons’ digital sales were up 21%, 23% and 25% during the third, second and first quarters of fiscal 2025, respectively.
McCollam noted during the earnings call that while the company’s e-commerce operations have become profitable, they have a considerably lower gross margin rate than its traditional grocery business.
Albertsons doesn’t have many unprofitable stores
Morris said during the call that only a “very, very small number” of its approximately 2,200 supermarkets are unprofitable, adding that the company has “not seen a dramatic shift or increase in store profitability at this time.” She noted that aside from a pause related to Albertsons’ unsuccessful effort to merge with Kroger, Albertsons has been examining its fleet to identify underperforming locations.
“We're continually looking at our store base and making decisions on whether to keep the stores or can we turn them around?” she said.
The retailer is stepping up its efforts to save money
Morris said Albertsons’ decision to move to a simpler operational structure and centralize center store merchandising promises to yield significant financial benefits for the company. The retailer expects the program, known as ACI Edge, to generate about $200 million in annual run-rate benefits, with the majority of those savings coming through in fiscal 2027.
The company plans to invest the savings into what Morris described as “sharper value, stronger fresh execution, greater personalization, digital convenience and ultimately, unit growth.”
Morris added that Albertsons is on pace in its current fiscal year to realize more than a third of the gains it hopes to achieve as part of its three-year plan to realize $2 billion in productivity improvements. She also said the company is looking for additional ways to improve productivity that go beyond its original goal.
The company is increasing its focus on its private label business
Albertsons believes it has made strong progress toward its goal of hitting a 30% penetration rate for goods carrying its private brands, Morris said, noting that the company is pleased with its efforts to lower costs for shoppers, especially on commodity items.
Morris added that Albertsons’ biggest private brands, including Lucerne, Signature Select and O Organics, have continued to turn in high repeat rates and resonate with shoppers. The company plans to improve product quality, boost penetration in value-focused categories and focus on innovating in the premium and better-for-you segments, Morris said. Albertsons also intends to make private label products easier for customers to spot in its stores, she added.
