Albertsons Companies, Inc. (ACI) Business Profile

What it does

Albertsons Companies is a U.S. food and drug retailer serving shoppers through supermarkets and digital channels. It sells groceries, general merchandise, health and beauty products, prescriptions, vaccines and fuel. Customers can shop in its stores, order delivery or arrange curbside pickup.

The company was founded in 1939 and is headquartered in Boise. Susan Morris is its chief executive officer. As of February 28, 2026, Albertsons operated 2,244 stores across 35 states and the District of Columbia. Its store names include Albertsons, Safeway, Vons, Jewel-Osco, ACME and Shaw’s. The company also operated 1,713 in-store pharmacies and 405 associated fuel centers.

Albertsons runs its stores through geographically based divisions, with a similar general mix of products and services across them. Its Own Brands portfolio includes grocery and other products sold under company-owned names such as Signature SELECT and O Organics. The portfolio offers more than 14,000 unique items.

The company uses its stores to fulfill digital orders. Shoppers can place delivery orders through Albertsons’ platforms or through third-party partners, including Instacart, DoorDash and Uber. Its loyalty programs provide personalized offers, digital coupons and rewards, while its retail media business offers vendors targeted marketing opportunities.

How it makes money

Albertsons earns most of its revenue by selling food, pharmacy products and other goods to shoppers. It reports its geographically based operations as one segment. Its stores have a similar general product mix and similar pricing across divisions, while local teams tailor offerings to their markets.

For the year ended February 28, 2026, revenue in its one reportable segment was $83.2 billion; in the second quarter of fiscal 2026, identical sales declined 0.8%.

Non-perishables, including grocery, dairy and frozen foods, accounted for $40.6 billion of revenue in the year ended February 28, 2026. Fresh products, such as produce, meat, prepared foods and bakery items, contributed $26.0 billion. Pharmacy generated $11.4 billion. Other revenue includes wholesale sales, commissions, rental income and media advertising. Digital sales are included in the product categories to which they relate rather than reported as a separate product line.

Albertsons uses pricing, promotions and loyalty rewards to encourage store visits and purchases. Its loyalty program offers personalized deals, digital coupons, fuel rewards and grocery rewards. The company also sells advertising opportunities to vendors through Albertsons Media Collective, using customer data from its loyalty and digital platforms to help target marketing.

Revenue is generated through ongoing shopping and prescription purchases, but spending and sales are not contractually recurring. Albertsons said its pharmacy customers drive three times larger basket size and lifetime value. In the second quarter of fiscal 2026, pharmacy identical sales grew even as the company faced sales headwinds from drug-price changes and a shift from branded prescriptions to generics.

Customers and how it sells

Albertsons serves grocery and pharmacy shoppers in the United States. Its stores operated across 35 states and the District of Columbia as of February 28, 2026, and served an average of 36.5 million customers each week. The company offers a similar general range of goods across its divisions, while local teams adjust merchandising and marketing to customer preferences in their communities.

Customers can shop in person, order delivery or use Drive Up & Go curbside pickup. Delivery was offered at more than 2,200 stores and curbside pickup at more than 2,100 stores. Third-party delivery partners provide another route for customers to place orders.

The loyalty program had 51.2 million members in fiscal 2025. Albertsons uses transaction and engagement data to provide personalized offers and inform merchandising and pricing. It was reported on October 26, 2026, that the company had launched Albertsons for U+, a paid subscription offering unlimited delivery and pickup alongside the benefits of its free loyalty program.

Albertsons said lower-income customers remained under pressure in the second quarter of fiscal 2026 and were trading down and buying more private-label products.

Suppliers and costs

Albertsons buys merchandise from third-party suppliers and manufactures some products sold under its Own Brands. It is not dependent on any individual supplier; one third-party supplier represented more than 5% of sales in fiscal 2025. The company relies on suppliers to deliver fresh and other inventory continuously, as well as raw materials for some of its own manufacturing.

As of February 28, 2026, Albertsons operated 22 dedicated distribution centers and 19 manufacturing facilities. Company-owned facilities manufactured 9.9% of Own Brands products by units in fiscal 2025; the remainder was purchased from third parties. Agricultural commodities are principal raw materials for the food Albertsons manufactures.

Employee costs, merchandise, distribution, energy and technology are part of the operating cost structure. Approximately 190,000 employees were covered by collective bargaining agreements as of February 28, 2026. The company also contributes to multiemployer pension plans.

In fiscal 2025, the gross margin rate fell to 27.2% from 27.7% in fiscal 2024. Albertsons attributed the decline in part to growth in pharmacy, which has a lower gross margin rate, and higher delivery and handling costs as digital sales grew. The company is working with its largest suppliers to reduce the upfront cost of goods and refine promotions.

Competitive position

Albertsons competes for food and drug purchases against supermarkets, supercenters, club stores, discounters, drugstores, online retailers and other local and specialty sellers. Competition takes place on price, location, product quality, selection, service and shopping convenience. The company says some primary competitors have greater financial resources or are not subject to collective bargaining agreements.

Albertsons identified Walmart and Amazon among the largest destinations for customers it loses. It was reported on October 29, 2026, that Albertsons had introduced a membership priced below annual subscriptions offered by Walmart, Amazon, Target and Kroger. Albertsons says it is not satisfied with its price position and plans targeted price and promotional investments by market and category.

The company’s potential sources of differentiation include its store network, local banners, Own Brands and loyalty data. Store-based fulfillment supports delivery and pickup, while loyalty data helps Albertsons tailor promotions and merchandising. Its Own Brands portfolio gives it products under names it controls.

Our reading: the store network and loyalty program provide useful distribution and customer-engagement advantages, but they are not exclusive defenses against competitors that also offer online shopping and promotions. Our reading: Own Brands provide another way to differentiate the assortment, though price competition and the need to keep products available limit the protection they provide.

Growth opportunities

Albertsons’ growth strategy includes digital shopping, loyalty, pharmacy, retail media and Own Brands. It also invests in stores and technology. In fiscal 2025, digital sales increased 21%, loyalty membership increased 12% to 51.2 million, and the company completed 94 remodels and opened nine new stores.

In the second quarter of fiscal 2026, e-commerce sales increased 11% and overall digital penetration reached 10.5%. Identical sales declined 0.8%. Albertsons attributed approximately 210 basis points of pressure on reported identical sales to several headwinds, including pharmacy drug-price changes, the shift to generics, the effect of a cyclospora outbreak and egg deflation.

Albertsons is accelerating its Own Brands efforts, including work on product variety, quality and cost. It has also reorganized from 11 divisions to four regions and centralized center-store merchandising under its ACI Edge initiative. The company plans to accelerate centralized buying and productivity efforts to support customer-value investments.

Albertsons uses technology in customer personalization, merchandise decisions and demand forecasting. Its Gateway forecasting capability is intended to improve replenishment and efficiency for promotional products. The company plans to present a more comprehensive customer strategy, productivity program and portfolio actions by its fourth-quarter earnings call.

Structural risks

• Competition and pricing: Rivals can attract shoppers through lower prices, convenience or other offerings. Promotions, advertising and investment in digital services may pressure Albertsons’ profitability and cash flow.
• Inflation and consumer spending: Food inflation can reduce gross margin rates and customer spending, while food deflation can reduce sales growth and earnings. Weaker finances or reductions in government assistance could also affect demand.
• Labor and pensions: Staffing is labor-intensive, and wage, healthcare and pension costs can rise. Disputes or unsuccessful negotiations with unions could disrupt operations; exiting certain multiemployer plans could trigger withdrawal liabilities.
• Pharmacy: Reimbursement and drug-pricing changes can pressure revenue and profitability. Pharmacy operations also carry dispensing, regulatory and liability risks that insurance may not fully cover.
• Supply and product safety: Disruptions to suppliers, distribution, power or transportation can cause inventory losses and lost sales, particularly for fresh products. Contamination or loss of customer confidence in food safety can also disrupt sales.
• Execution and technology: Productivity initiatives may not deliver anticipated savings and can require upfront spending or operational changes. Albertsons also must adapt to changing digital shopping preferences and technologies while controlling costs.

Bottom line

Our reading

Albertsons is a store-based grocery and pharmacy retailer using digital ordering, loyalty data and its own brands to reach shoppers across its markets. Its exposure is to the economics of food retail: price competition, labor and supply costs, and the lower margins associated with a growing digital mix. (item1, item1a, item7)

The company’s growth initiatives give it several ways to engage customers, but its current plan also depends on reducing costs and improving store execution while sales face pressure. (call_prepared, call_qa)