Albertsons Pulls Forecasts as Meg Whitman Signals Deep Overhaul

Albertsons pulled its financial forecasts on Tuesday, the first clear signal of how deeply new Executive Chairman Meg Whitman plans to overhaul the struggling grocery chain.

The company reported net sales of $18.9 billion for its second fiscal quarter, dragged down by a 0.8% drop in identical sales — the metric that strips out newly closed or opened stores. It was the second consecutive quarterly decline, according to the company's results.

What did Whitman tell Wall Street?

"Everything should be on the table," Whitman told analysts on Albertsons' quarterly conference call. "Dramatic improvement is needed now. Albertsons must move faster to change the trajectory of the business."

She hinted the company could shed some of its brands through what she called "potential strategic actions." Albertsons operates its namesake stores plus 21 other chains, including Safeway, Vons, Jewel-Osco, Tom Thumb and Randalls.

The forecast withdrawal ties directly to "ACI Edge," the review CEO Susan Morris announced in July to improve competitiveness by examining strategy, cost structure, operations and the brand portfolio. Pulling guidance until that review ends suggests Whitman wants a deeper turnaround than originally planned, having joined the company just last month.

Why is Albertsons under pressure?

The chain faces the same squeeze hitting all grocers: food inflation and higher gas prices have cash-strapped shoppers cutting back on non-essentials. "The reality right now is that the economy is tough for many of our customers," Morris said.

Albertsons' problem compounds the industry's. Its lower-income customers are trading down to cheaper items and store brands, which either pinches margins or sends shoppers to Walmart and Kroger. And Albertsons carries a cost structure higher than its rivals', leaving less room to shield consumers from price increases than discount grocers like Walmart and Kroger or bulk operators like Sam's Club and Costco.

GlobalData managing director Neil Saunders called Albertsons' prices "ridiculously high compared to rivals," adding that would "be partly justifiable if other dimensions—store experience, service, private label and so forth—were above par, but they're not." His prescription: Albertsons needs to "invest in prices" — retail speak for lowering them — which in turn piles pressure on finding cost savings.

The company's sprawling empire of store chains has produced complex operations and the higher costs that come with them, making pricing flexibility harder to achieve.

Why did Albertsons hire a tech executive?

Whitman has no grocery experience and little retail background, from her time as CEO of eBay. Albertsons brought her in for her turnaround chops and decisiveness.

At HP, where she took over as CEO in 2011, she simplified the structure and product portfolio of a company damaged by the Autonomy acquisition, battered by strategy flip-flops and squeezed by declining revenue and margins. She oversaw the split of HP into two companies.

Before that, she ran eBay for a decade, professionalizing the management structure and operations of a hot startup and setting it up for a period of fast growth.

As executive chair rather than simply chair, her role is far more hands-on. She acts as a close operations and strategic adviser to Morris, helping sharpen strategy, improve execution and move with speed.

What's already changed under Morris?

Morris became CEO in 2025 after the collapse, a few months earlier, of the planned $24 billion Albertsons-Kroger merger triggered the exit of both companies' chiefs. Albertsons is currently suing Kroger for $9 billion over the merger's failure. Morris had spent seven years as operations chief before the promotion.

She hadn't waited for Whitman to start restructuring. Morris cut the number of operating regions from 11 to four to build economies of scale and speed up decision-making. She also centralized much of Albertsons' merchandising decisions under a single team.

What comes next?

"The company has greater potential than its results have reflected," Whitman said. "But dramatic improvement is needed now. I believe we will turn the corner."

With forecasts suspended and a brand-portfolio review underway, the market won't have to wait long to see whether Whitman's record of dramatic corporate surgery — HP's split, eBay's professionalization — translates to the grocery aisle.