Listen to the article
This audio is auto-generated. Please let us know if you have feedback.
Dive Brief:
- Albertsons announced Thursday a new regional operating model that consolidates 11 divisions into four regions and said it is centralizing its center store merchandising.
- The grocer also said President and CFO Sharon McCollam plans to retire later this year but remain in her role until a successor is named. Afterward, she will serve in an advisory role with the grocer until its fiscal year ends on Feb. 27, 2027.
- The changes come on the same morning Albertsons announced a nearly 1% drop in comparable-store sales and flat net sales growth in the first quarter of fiscal 2026.
Dive Insight:
The changes reflect an effort by the retailer to direct its resources toward better serving shoppers who are hyper-focused on price as it deals with lower volumes, CEO Susan Morris said during an earnings call Thursday morning.
At the regional level, the retailer plans to “sharpen accountability and strengthen execution in the areas that matter most to our customers: fresh service, store standards, local merchandising and community connection,” Morris said. Albertsons also intends to use its updated operating model to improve aspects of the business, including center store merchandising, supply chain operations and technology, that can benefit from its scale, she said.
Under the new structure, dubbed “ACI Edge,” Albertsons has replaced its divisions with regions encompassing California; Portland, Oregon, and Seattle; the South; and the East. The South region includes Albertsons’ United Supermarkets banner, while Jewel-Osco and Shaw’s are folded into the East region.
Albertsons said it does not plan to realign stores or districts as part of the shift to a simpler structure. Local markets will continue to make decisions on fresh merchandising.
Morris added that she expects the new regional structure to deliver clearer accountability, noting that an executive with “end-to-end responsibility for performance” will oversee each region. The company also will look to a single merchandising organization to manage relationships with suppliers across all of its approximately 2,200 stores.
In addition to reorganizing its operations, Albertsons plans to accelerate investments aimed at lowering prices, Morris said. That reallocation of funds will bring down earnings, but is expected to improve traffic, units sold and loyalty over the longer term, she said.
Morris added that Albertsons is intent on making its suppliers shoulder a substantial portion of the cost of holding down prices for shoppers.
“We’re being clearer than we’ve ever been before with our manufacturing and vendor partners on the centralization of center store,” she said. “We expect them to lean in.”
McCollam attributed the 0.8% identical sales decrease in Q1 in part to a decline in purchases by lower-income shoppers and pressure from the federal Inflation Reduction Act, which has driven down top-line pharmacy revenue for grocers. Declining egg prices also held back sales, she said, noting that Albertsons would have seen positive same-store sales growth if it did not face those headwinds.
Albertsons lowered its expectations for the balance of fiscal 2026 to reflect its disappointing results. The retailer now forecasts that its same-store sales for the year will decline in a range between 0.5% and 1.5%. It had previously anticipated that the metric would be flat or rise slightly.
Morris said during the call that Albertsons is looking inside and outside the company for a replacement for McCollam, who came out of retirement to join the supermarket chain in September 2021.
The retailer’s goal is to “identify a transformational leader who combines exceptional financial acumen with a strategic vision to drive sustainable growth and long-term value,” Morris said.
Albertsons’ share price fell more than 23% on Thursday morning, hitting its lowest level since the company went public in June 2020.
