Safeway is set to shut down more stores as its parent company, Albertsons Companies, reassesses its retail operations following the unsuccessful attempt to merge with Kroger for $24.6 billion.
According to a statement to USA Today, Albertsons indicated that the merger delay led them to pause potential “portfolio optimization” efforts. After the deal collapsed, they resumed the evaluation of their store network, ultimately deciding to close certain locations while also opening new stores in areas projected to have long-term demand.
In the latest annual report from Albertsons, it was noted that the company closed 35 stores in fiscal 2025—an increase compared to just 10 closures the previous year and up from eight in fiscal 2023. They managed to open nine new stores during this same fiscal year, ending with a total of 2,244 locations across 35 states and Washington, DC.
These closures have significantly affected the grocery chain’s financial performance. Sales in fiscal 2025 dropped by $63.4 million due to net store closures, while the costs associated with closing stores and dealing with surplus properties surged to $45.1 million, a steep rise from $15.9 million the year before.
In a different note, Costco is reintroducing its popular Kirkland Treats, which haven’t been available for two years.
Albertsons has also been investing in existing stores, having completed 94 renovations and opened nine new stores in fiscal 2025, part of about $1.83 billion in capital expenditures that includes advancements in digital and technology sectors.
Albertsons manages several grocery store brands, including Safeway, Vons, Jewel-Osco, ACME, Shaw’s, and Tom Thumb, employing approximately 280,000 individuals as of February 28, 2026.
Though USA Today hasn’t received a full list of the Safeway closures, it reported specific locations shutting down in 2026, including stores in Hayward, California; Newport, Oregon; and Washington, DC.
Albertsons is reportedly making efforts to rehire affected employees at other nearby stores.
This store restructuring follows the breakdown of a merger proposal with Kroger, first announced in 2022, which would have positioned the combined entity among the largest grocery chains in the country.
The FTC intervened, filing a lawsuit to block the deal on the grounds that it would reduce competition, potentially leading to higher food prices and adversely impacting grocery store work dynamics.
On December 10, 2024, the Federal District Court for the District of Oregon upheld the FTC’s request for a preliminary injunction against the merger, which had also been contested by nine state attorneys general.
The situation escalated with Kroger seeking a $600 million termination fee from Albertsons, which, in turn, countersued, alleging that Kroger owed them money and accused them of not adhering to regulatory protocols. Albertsons contested Kroger’s claims.
Albertsons has yet to respond to inquiries regarding the recent store closures.
