Dive Brief:
- Albertsons intends to intensify efforts to cut expenses and simplify its business as the struggling supermarket chain strives to mount a turnaround, the grocer’s executives said Tuesday. Those moves could include eliminating jobs and leaving regions where its stores are underperforming, according to CEO Susan Morris.
- The supermarket company’s comparable store sales fell by just under 1% during the second quarter of fiscal 2026, while net sales and other revenue declined 0.1%, to $18.9 billion. Digital sales rose 11% during the quarter.
- Albertsons’ performance “does not reflect the quality of our assets or the capabilities of our team,” Morris said during an earnings call. “Simply put, we’re not satisfied with the results and the current trajectory of our business.”
Dive Insight:
Albertsons’ top executives made clear during the call that the retailer needs to quickly take drastic action to reverse its sagging results.
In addition to slashing costs and streamlining operations, Albertsons needs to lower prices and enhance the store experience while increasing traffic and market share, newly appointed Executive Chair Meg Whitman said. The retailer also must focus on improving its comparable-store sales and revenue while boosting its stock price, which is off by about a quarter since the start of 2026, Whitman added.
“Albertsons must become a simpler, more focused company that gets the basics right every day,” said Whitman, who assumed her role last month. “I joined Albertsons because I believe the company has greater potential than its results have reflected, but dramatic improvement is needed now. Albertsons must move faster to change the trajectory of the business.”
The negative comparable-store sales rate Albertsons posted during Q2 follows a similar decline in Q1. The retailer has seen that metric lose momentum for three consecutive quarters.
Morris said Albertsons’ problems stem in part from changes the company made “for good reasons and with the right intentions,” but that have instead held it back by adding complexity, creating unnecessary processes and increasing costs.
To change course, Albertsons will concentrate on better serving shoppers by focusing on core areas like price, promotions, freshness, convenience and customer service, she said.
“We recognize the need to simplify how we work, sharpen accountability, and move with greater speed and discipline to deliver better results,” said Morris. “Going forward, our focus will be much narrower. Our resources will be concentrated on the right projects that most accelerate our results, and our expectations and accountability for results will be significantly higher.”
Morris indicated that Albertsons will examine its workforce as it looks to save money. “We did some work last year and saw a substantial reduction in headcount, but quite frankly, there’s more to be had, and you’ll see us taking aggressive action there in the next 12 to 18 months as well,” she said.
Albertsons expects to provide details about its turnaround strategy during its fourth-quarter earnings call, Morris said.
Albertsons did not provide updated projections about how it sees the business performing during the coming quarters. “Although the business performed in line with our revised guidance expectations during the second quarter, we do not believe it is prudent today to provide an incremental update to our financial outlook,” Cody Perdue, Albertsons’ interim CFO, said during the earnings call.
