Safeway announces new wave of store closures

Safeway is closing more stores, and the latest cuts are part of a much bigger problem for its parent company. Albertsons Companies is once again reviewing its sprawling grocery-store empire after its planned $24.6 billion merger with Kroger collapsed, forcing the company to take another hard look at which locations are worth keeping open.

And just like that, the grocery-store version of spring cleaning has begun.

Safeway is trimming the map

Albertsons told USA Today that it had slowed its store-review process while the Kroger deal was still alive. Once that merger fell apart, the company resumed evaluating its locations, looking for markets where it sees long-term growth while closing stores that aren't pulling their weight.

The company hasn't released a complete list of upcoming Safeway closures. But several Safeway locations have already closed in 2026, including stores in Hayward, California; Newport, Oregon; and Washington, D.C.

According to Albertsons, it is trying to move as many affected employees as possible into positions at other stores.

Albertsons closed 35 stores last year

The company's latest numbers show just how much its store footprint has been changing. Albertsons closed 35 stores during fiscal 2025, more than three times the 10 stores it closed the previous year and up from eight in fiscal 2023. It opened nine new locations during fiscal 2025, ending the year with 2,244 stores across 35 states and Washington, D.C.

Those closures are not just dots disappearing from a map. They are hitting the company's bottom line, too.

Albertsons said store closures, after accounting for new openings, reduced fiscal 2025 sales by $63.4 million. Costs tied to closed stores and surplus properties also jumped to $45.1 million, compared with $15.9 million the year before.

The company is still spending billions

Albertsons is not simply shutting stores and retreating. The company completed 94 store remodels and opened nine new locations during fiscal 2025. It also spent roughly $1.83 billion on capital investments, including upgrades to digital and technology platforms.

That's a clear signal that Albertsons isn't giving up on physical grocery stores, but rather trying to figure out where those stores make sense and where they don't. The company operates 22 grocery banners, including Safeway, Vons, Jewel-Osco, ACME, Shaw's and Tom Thumb, and employed roughly 280,000 people as of February 28, 2026. So when Albertsons moves a piece on the board, it's moving a very large piece.

And then there was the Kroger disaster

The store closures are closely tied to the company's failed attempt to merge with Kroger. Albertsons and Kroger announced their proposed $24.6 billion combination in 2022, pitching it as a way to create one of America's largest grocery companies.

The Federal Trade Commission wasn't convinced. So it sued to block the merger, arguing that combining the two grocery giants could reduce competition, push grocery prices higher and weaken competition for workers.

On December 10, 2024, a federal court in Oregon granted the FTC's request for a preliminary injunction, blocking the deal. The merger eventually collapsed, and things got even more out of hand from there.

Now Kroger and Albertsons are fighting over the breakup

After the merger failed, Albertsons sought a $600 million termination fee from Kroger. Kroger later filed counterclaims in Delaware, arguing that it didn't owe the payment and accusing Albertsons of undermining the regulatory process. Albertsons has disputed Kroger's version of events.

So while the two grocery giants are not combining into one mega-chain, the failed deal continues to have consequences. For Albertsons, that means going back to the drawing board and deciding which stores deserve another investment and which ones have reached the end of the aisle.

More closures could be coming

Albertsons hasn't told USA Today exactly which additional Safeway locations are on the chopping block. What we do know is that the company has resumed reviewing its store network after putting that process on hold during the Kroger merger fight.

That means more closures could be announced as Albertsons continues figuring out where its grocery empire makes financial sense. And if your local Safeway has suddenly started looking a little emptier than usual, you might want to enjoy those familiar aisles while you still can.

Source: Fox Business