Friday, October 30, 2026

Kroger vs. Albertsons: One Has a Growth Plan, the Other Needs a Turnaround. Will Either Win Tomorrow’s Food Customer?

 


The supermarket wars are no longer just about price, purchasing power, or store count. Kroger is trying to build its next growth engine. Albertsons is trying to reverse weakening sales. Both must prove that legacy supermarket brands can remain relevant to consumers who increasingly find food solutions everywhere according the Grocerant Guru®.

For decades, traditional supermarkets built their businesses around weekly shopping trips, stocked pantries, fresh produce, meat departments, center-store aisles, and loyalty programs. That model helped make supermarkets central to American food shopping.

But the consumer has changed.

Today, dinner might come from a grocery deli, a restaurant drive-through, a convenience store, a warehouse club, a meal kit, or a combination of food purchased across several channels. Consumers increasingly choose the solution that best fits the occasion, budget, schedule, and appetite.

That creates a difficult question for Kroger and Albertsons: Are they transforming themselves into more relevant food businesses, or are they still fighting yesterday’s supermarket battles while competitors capture tomorrow’s eating occasions?

According to Steven Johnson, Grocerant Guru® at Tacoma, Washington-based Foodservice Solutions®, the real competitive threat is not simply another supermarket. It is the retailer, restaurant, or foodservice operator that makes satisfying the next meal easier.


Kroger vs. Albertsons: The Performance Gap Is Becoming More Important

The failed $24.6 billion merger between Kroger and Albertsons was supposed to create a larger supermarket competitor with greater purchasing power and the ability to compete more effectively against Walmart, Costco, Amazon, and other retailers.

Federal and state courts blocked the proposed transaction in December 2024, and Kroger terminated the merger agreement. The companies were left to pursue their futures independently.

Now the comparison is more revealing than the merger debate itself.

Their latest reported second-quarter results for fiscal 2026 show two different operating situations. Kroger reported modest positive identical sales and substantial adjusted e-commerce growth. Albertsons reported declining identical sales, slower overall revenue, and a need to accelerate its turnaround.


The latest numbers tell a different story

Performance measure

Kroger

Albertsons

Latest reported fiscal Q2

Ended Aug. 15, 2026

Ended Sept. 12, 2026

Identical sales

+0.2%

−0.8%

Digital/e-commerce sales growth

+20% adjusted e-commerce

+11% digital

Strategic direction

Multi-year growth and modernization plan

Accelerated turnaround and cost reduction

Immediate challenge

Reignite comparable sales growth

Reverse sales weakness while improving profitability

Sources: Kroger's second-quarter results and Albertsons' second-quarter results. The fiscal quarters ended on different dates, and the companies' digital-sales measures are not identical, so these figures are directional comparisons rather than perfectly like-for-like measures.

The contrast matters.

Kroger's 0.2% identical-sales growth is positive, but it is hardly evidence of a powerful sales engine. The company also lowered its full-year 2026 identical-sales outlook. Its 20% adjusted e-commerce growth is encouraging, although digital growth must ultimately translate into profitable customer relationships and stronger overall sales.

Albertsons faces a more immediate problem. Its 0.8% identical-sales decline suggests that its existing business is not generating the sales momentum management needs. Digital sales increased 11%, but that growth was not sufficient to prevent the decline in identical sales.

Albertsons also announced a comprehensive business review, accelerated cost-saving efforts, and the withdrawal of its fiscal 2026 financial outlook.

The key distinction: Kroger is trying to accelerate a growth strategy. Albertsons is trying to repair its operating performance while building its next strategy.

Neither position guarantees success. But the companies are not starting from the same place.


Kroger: A Defined Plan, but Execution Is the Test

On October 20, 2026, Kroger outlined a multi-year strategy to build what it calls America's Favorite Grocer.

Its stated priorities include investing in fresh food and meals, strengthening private brands, expanding its Boost membership program, improving digital profitability, modernizing operations, and using technology and artificial intelligence to improve execution.

Kroger also established long-term financial targets, including approximately 3% comparable-sales growth in 2029, excluding fuel and pharmacy, alongside targeted annualized adjusted EBITDA growth of 3% to 6% and adjusted net earnings-per-share growth of 7% to 11% for fiscal 2027 through fiscal 2029.

Source: Kroger's October 20, 2026 investor strategy announcement.

This is a more explicit growth roadmap than a strategy centered primarily on defensive consolidation.

But a financial target is not a consumer strategy by itself.

Kroger must demonstrate that investments in fresh food, prepared meals, digital shopping, private brands, and loyalty programs give consumers more reasons to choose its stores. The company needs to turn those initiatives into better meal solutions, more compelling value, and stronger shopping occasions.

Consider the practical opportunity. A customer shopping for dinner should be able to find an appealing combination of a prepared entrée, fresh produce, a side dish, and a dessert at a clearly communicated price. A customer seeking lunch should find satisfying hand-held foods and portable fresh options without navigating an entire supermarket.

Kroger's scale provides a platform for making these offerings available across many stores. Its challenge is to make that scale work at the individual meal occasion.

Kroger's risk is that it executes a sophisticated operational plan without making the consumer's food choices sufficiently easier, more relevant, or more valuable.

Albertsons: The Turnaround Must Reach the Customer's Shopping Basket

Albertsons' position is more urgent.

On October 13, 2026, the company reported second-quarter fiscal 2026 identical-sales growth of negative 0.8%. Net sales and other revenue declined 0.1% to approximately $18.9 billion. Digital sales rose 11%, but the company announced an accelerated business review aimed at simplifying its organization, reducing costs, reinvesting in customer value, and improving long-term performance.

Albertsons also withdrew its full-year fiscal 2026 financial forecasts as it undertook the review.

Source: Albertsons' second-quarter fiscal 2026 results.

The company has meaningful assets. As of September 12, 2026, Albertsons operated 2,240 stores across 35 states and the District of Columbia, using 22 supermarket banners that include Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, and ACME. Its business also includes pharmacies, in-store coffee shops, fuel centers, and digital platforms.

That footprint gives Albertsons opportunities to build regional food relevance. But a large portfolio of established banners can also make organizational simplification, consistent execution, and brand differentiation more complicated.


The company's immediate challenge is to reduce unnecessary costs without reducing the quality, availability, or convenience that customers expect.

Cost savings can create money to reinvest in lower prices and better stores. But cutting expenses does not automatically create a compelling food proposition.

Albertsons must determine where its banners have distinctive customer advantages, which stores and markets offer the best growth opportunities, and how prepared food and meal solutions can improve the frequency and value of customer visits.

It also needs to make its value proposition unmistakable. Shoppers under financial pressure should not have to work hard to understand which meals are affordable, which products deliver better value, and which promotions genuinely save them money.

Albertsons' risk is that the turnaround becomes an exercise in organizational restructuring and cost control while consumers continue taking their food dollars elsewhere.

The Digital Growth Paradox: More Online Sales Do Not Automatically Mean More Food Relevance

Kroger's adjusted e-commerce sales increased 20% in its latest reported quarter, while Albertsons' digital sales increased 11%.

Those are meaningful growth rates, but they should not be confused with overall comparable-sales growth. Nor should the companies' different digital metrics be treated as directly interchangeable.

Digital shopping can improve convenience, help customers plan purchases, support personalized promotions, and make pickup or delivery easier. But digital tools are most valuable when they strengthen the underlying food offering.

An app cannot rescue a weak meal assortment. Personalized promotions cannot permanently compensate for an unconvincing value proposition. Faster delivery cannot guarantee that customers will return if the food itself disappoints.

The opportunity is to connect digital capabilities with the entire food experience.


Can customers quickly identify a complete dinner for two? Can parents assemble an affordable family meal without making several stops? Can shoppers find fresh, portable breakfasts and lunches that fit their schedules? Can retailers recommend complementary meal components that save customers time and money?

These are not simply technology questions. They are questions about food merchandising, menu development, customer behavior, and the consumer's total eating experience.

Kroger has an opportunity to use its growth investments to create a more integrated food platform. Albertsons needs to ensure its turnaround produces visible improvements in the everyday shopping experience.

Both companies must move beyond measuring digital adoption and demonstrate how digital convenience improves customer retention, basket value, and profitability.

The Grocerant Niche: Where Both Supermarkets Must Compete Differently

The Grocerant Niche sits at the intersection of grocery retail and foodservice. It encompasses fresh, convenient, ready-to-eat, heat-and-eat, and easy-to-assemble food solutions.

The consumer does not necessarily care which department or channel provides the solution. The consumer cares whether the food satisfies the need.

A grocery deli may offer rotisserie chicken, prepared macaroni and cheese, and salad. A convenience store may sell a breakfast sandwich, fresh fruit, and a beverage. A restaurant may offer a takeout family meal. All can compete for the same eating occasion.


This is the battle for share of stomach.

For Kroger, the opportunity is to use its scale, fresh departments, private brands, and digital capabilities to make meal solutions more accessible and attractive.

For Albertsons, the opportunity is to use its regional banners and existing customer relationships to identify local preferences, sharpen value, and improve the relevance of prepared foods and meal components.

Both should examine more than conventional grocery transactions. They should evaluate the occasions they serve, the occasions they lose, and the reasons consumers choose competing solutions.

A shopper who buys ingredients for a weekend dinner may buy a prepared meal on a busy weekday and a hand-held breakfast on the way to work. Retailers that can serve those different needs have more opportunities to earn repeat visits and capture a larger share of food spending.

The strategic goal is not to turn every supermarket into a restaurant. It is to make the supermarket more useful when customers decide what to eat.

The Consumer Is the Judge, Not the Corporate Strategy

Inflation and food-price sensitivity make value essential. But value does not mean price alone.

Consumers evaluate what they receive in exchange for the money, time, and effort they invest. Food quality, flavor, convenience, portability, portion size, and the social experience all contribute to perceived value.

That is why meal bundles, ready-to-eat foods, heat-and-eat entrées, and mix-and-match meal components can be important. They help customers solve a practical problem while giving retailers opportunities to sell complementary products.

A clear dinner bundle can reduce decision-making. A prepared lunch can save time. A combination of fresh fruit, a sandwich, and a beverage can satisfy an immediate need without requiring a full shopping trip.

These are tangible benefits customers can recognize.

Kroger's challenge is to turn its strategic investments into more reasons to shop. Albertsons' challenge is to make its turnaround visible in the prices, products, and experiences customers encounter.

Neither company can assume that consumers will remain loyal simply because a store has served their families for decades.

Legacy creates familiarity. Relevance must be earned repeatedly.



Can Kroger and Albertsons Both Survive?

Both companies have substantial assets, established customers, recognizable brands, and opportunities to adapt. It is premature to declare either company destined to fail.

But the near-term outlooks differ.

Kroger appears better positioned strategically today. Its latest comparable-sales result was positive, its adjusted e-commerce business is growing rapidly, and its October 2026 plan establishes a multi-year framework for sales, earnings, and operational improvement. It still must deliver stronger sales momentum and prove that its investments create meaningful customer value.

Albertsons faces the more immediate challenge. Declining identical sales, a withdrawn financial outlook, and an accelerated business review indicate that management must address performance problems while deciding how to simplify and reinvigorate the business. Its store network and regional banners remain important assets, but those assets must translate into stronger customer demand.

This is a comparison of current strategic positions, not a prediction that one company will survive and the other will not.

The larger competitive threat to both is that customers are increasingly willing to divide their food spending among supermarkets, mass merchants, restaurants, convenience stores, and digital channels.

The next era of grocery competition will reward retailers that make food shopping and meal decisions easier, more affordable, and more relevant to individual occasions.

The old question was, "Where do consumers buy groceries?"

The new question is, "Where do consumers choose to satisfy their next food need?"

Kroger has articulated a plan to grow. Albertsons is working to restore its momentum. Both must prove they understand that the customer—not the corporate legacy—is the ultimate measure of relevance.


Three Insights from the Grocerant Guru®

1. Kroger has the clearer growth roadmap, but the customer must see the difference. Digital growth, private brands, and operational modernization matter only when they translate into better food, stronger value, and easier meal decisions. A strategic plan earns its value at the point of purchase.

2. Albertsons must make its turnaround tangible. Cost reduction and organizational simplification can help, but customers need to experience the benefits through sharper pricing, compelling fresh food, convenient meal bundles, and improved execution. A turnaround that customers cannot see is unlikely to rebuild loyalty on its own.

3. Both companies must compete for the next eating occasion. The competition is not confined to supermarket aisles. It includes restaurant takeout, convenience-store meals, ready-to-eat snacks, and mix-and-match components. The grocer that solves more consumer food needs has more opportunities to capture share of stomach.

The Grocerant Guru® bottom line: Kroger currently has the more clearly articulated growth strategy; Albertsons has the more urgent turnaround challenge. Neither can rely on legacy brand recognition alone. In today's food marketplace, consumers are dynamic, not static—and the retailer that makes the next meal easier, more flavorful, and more affordable has the best opportunity to win.

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