The news: Kroger and Albertsons are pursuing new strategies to regain their competitive footing as mass merchants, club retailers, discounters, and Amazon grab a larger share of grocery spending.

Kroger plans to cut 37% of its corporate workforce, or about 3,000 jobs, over the next three years in a bid to simplify operations and redirect resources toward lowering prices, improving the customer experience, and investing in store employees.

Albertsons launched a “comprehensive business review” following a disappointing Q2 in which revenues, comparable sales, and profits declined. Newly appointed executive chair Meg Whitman said “everything should be on the table” as the grocer seeks to shore up its core business and reduce prices for customers.

The strategy: Both grocers are betting that a streamlined operating structure will improve their ability to win shoppers.

• Kroger CEO Greg Foran said that a smaller corporate workforce would allow for faster decision-making and enable more resources to be allocated to support investments in prices, store employees, and the shopping experience.
• Whitman said on Albertsons’ Q2 earnings call that the grocer “must become a simpler, more focused company that gets the basics right every day” to give customers a reason to visit.

The challenge: Kroger and Albertsons must contend with the fact that shoppers are less inclined to view traditional grocers as their primary destination when buying food and other essentials.

• 37% of shoppers consider mass retailers their primary destination for grocery purchases—up 6 percentage points YoY—compared with 36% who mainly visit supermarkets, according to FMI’s US Grocery Trends 2026 report. That preference is particularly pronounced among younger shoppers, with 44% of millennials and 42% of Gen Zers choosing mass merchants as their primary grocer.
• Albertsons, Kroger, and Ahold Delhaize USA each lost share in the 12 months ended June 30, according to a Numerator analysis of 15 food retailers. Amazon and Whole Foods posted the largest share gains, followed by Costco and Walmart.

That gulf is widening as online competition ramps up. More grocery dollars are flowing to Amazon and Walmart thanks to their investments in fast delivery: We expect Amazon and Walmart, including Sam’s Club, to account for 75.7% of grocery ecommerce sales this year, up more than 3 percentage points from 2025. Meanwhile, value-focused retailers like Costco, Aldi, and Lidl are attracting price-conscious shoppers.

Implications for grocery: Albertsons and Kroger recognize that a new approach is needed to stem their market share losses, but neither has laid out a comprehensive turnaround path. Lowering prices is a necessity as shoppers adopt a variety of tactics—including purchasing cheaper brands, buying fewer items, and switching to less expensive stores—to manage their grocery budgets.

But price is only one piece of the puzzle. With Amazon and Walmart dominating grocery ecommerce, strengthening the in-store experience will be critical for Kroger and Albertsons to reengage shoppers. That will require investing in frontline employees to improve staffing levels and service, as well as inventory management tools to make sure shelves are stocked and products are fresh.

Beyond that, grocers need to find ways to distinguish themselves. Expanding prepared food options could help attract spending that is shifting away from restaurants. Refreshing store layouts and assortments to highlight new products and on-trend categories like wellness could encourage discovery and boost impulse purchases.