Kroger’s ambitious chase for Albertsons, meant to deliver massive scale and price reductions, crumbled under regulatory blocks and lawsuits. The $24.6 billion deal’s collapse has forced the nation’s top traditional grocer into an abrupt retreat: shuttering about 60 underperforming stores, trimming jobs, and rethinking its expansion-heavy approach amid tightening grocery margins.
Merger Collapse Triggers Closures
After nearly three years of pursuit, Kroger abandoned its bid to acquire Albertsons in December 2024 when federal judges issued injunctions. The company quickly pivoted, announcing on June 20, 2025, during its first-quarter earnings call, plans to permanently close roughly 60 supermarkets—about 2% of its 2,731 stores across 35 states. These closures, set to unfold over 18 months, target locations failing to produce sustainable results and come with a $100 million impairment charge. The move marks Kroger’s first significant contraction after years of growth-focused strategies.
Leadership Pivot in Public View
Interim CEO Ron Sargent, who took over on March 3, 2025, following Rodney McMullen’s resignation amid a board probe into ethics violations, addressed investors directly. Sargent stressed urgency, stating the company would “move with speed,” concentrate on its core business, and “run great stores.” This came as rising labor costs, theft, supply chain pressures, and competition from Walmart, Amazon, Costco, and Aldi squeezed operations. The shift signals a broader reset, pulling back from merger-driven ambitions to fortify existing assets.
The Deal That Fell Apart
Kroger and Albertsons revealed their $24.6 billion merger in October 2022, promising efficiencies to lower prices. Regulators, led by the Federal Trade Commission, filed suit in February 2024, citing risks to competition and higher consumer costs. On December 10, 2024, judges halted the transaction. Albertsons terminated the agreement the next day, securing a $600 million fee and launching a lawsuit alleging Kroger failed to secure approval with best efforts. The legal battles continue, with courts rejecting arguments that promised price cuts outweighed antitrust concerns.
Failed Divestiture Reshapes Footprint
To appease regulators, Kroger offered to sell 579 stores to C&S Wholesale Grocers, which then ran just 23 supermarkets. The FTC dismissed the plan, deeming C&S too small to maintain competition. Judge Adrienne Nelson highlighted “significant obstacles” for the buyer. With the divestiture scrapped, those stores remained with Kroger, but now 60 others face closure. Only two of the 39 already shuttered or scheduled sites were from the divestiture list, indicating a distinct strategy focused on chronic underperformers.
Human and Community Toll Mounts
The closures threaten 6,000 to 9,000 jobs, based on 100 to 150 employees per store. Kroger offers transfers, but workers report challenges: longer commutes of up to 45 minutes, added childcare and transport costs, reduced hours, or lost seniority. Union protections cover some, but not all. Sites span Texas, Georgia, Illinois, Indiana, Virginia, California, Colorado, Kentucky, Louisiana, Maryland, North Carolina, Oregon, Tennessee, and Wisconsin under banners like Food 4 Less, Mariano’s, Pick ‘n Save, and King Soopers. Communities face food access gaps, forcing reliance on distant or less fresh options, particularly in lower-income areas. Local retail often suffers ripple effects as anchors vanish.
Kroger’s actions underscore grocery retail’s vulnerabilities, betting on robust markets, in-store e-commerce, and targeted investments to stabilize. The path ahead will test how well these adjustments preserve access, affordability, and employment in a fiercely competitive landscape.
Sources:
Kroger Reports First Quarter 2025 Results. The Kroger Co., June 20, 2025
FTC Challenges Kroger’s Acquisition of Albertsons. Federal Trade Commission, February 2024
Albertsons Terminates Merger Agreement. Albertsons Companies Inc., December 11, 2024
Kroger to accelerate store openings as it moves fulfillment to retail locations. CoStar, October 2025
Albertsons Files Lawsuit Against Kroger for Breach of Merger Agreement. Albertsons Companies Inc., 2025