Kroger Merger Collapse Triggers Wave of Safeway Closures
Safeway Stores Closing After Failed Kroger Merger: What You Need to Know
The Big Picture
Imagine two giant grocery store chains deciding to become one massive company. That was the plan for Albertsons (which owns Safeway) and Kroger. They announced a $24.6 billion merger in 2022. But the government said "no," the deal fell apart, and now Albertsons is closing some Safeway stores as it figures out its next steps.
Why Are Stores Closing?
The Merger That Wasn’t
- 2022: Albertsons and Kroger announce plans to merge
- December 2024: A federal court blocks the merger after the Federal Trade Commission (FTC) sues to stop it
- Early 2025: The deal officially collapses
- Now: Albertsons resumes reviewing its store portfolio — closing some, opening others
IMPORTANT POINT
Albertsons paused its store review while the merger was pending. Once the deal died, they restarted the process — leading to more closures than in previous years.
By the Numbers: Fiscal Year 2025
| Metric | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
|---|---|---|---|
| Stores Closed | 35 | 10 | 8 |
| Stores Opened | 9 | — | — |
| Total Locations (End of Year) | 2,244 | — | — |
| Sales Lost from Net Closures | $63.4 million | — | — |
| Costs from Closed Stores | $45.1 million | $15.9 million | — |
Key Takeaway: Closures more than tripled compared to the prior year.
Which Safeway Stores Have Closed Recently?
USA Today reported these 2026 closures (Albertsons hasn’t released a full list):
- 231 W. Jackson St. — Hayward, California
- 2220 N. Coast Highway — Newport, Oregon
- 1601 Maryland Ave. — Washington, D.C.
What About Employees?
Albertsons says it’s working to transfer affected workers to other nearby stores. The company employs roughly 280,000 people across its 22 grocery banners (including Safeway, Vons, Jewel-Osco, ACME, Shaw’s, and Tom Thumb).
It’s Not All Closures — There’s Investment Too
Despite shutting some locations, Albertsons spent $1.83 billion in fiscal 2025 on:
- 94 store remodels
- 9 new store openings
- Digital & technology platforms
IMPORTANT POINT
"Portfolio optimization" = corporate speak for: figuring out which stores make money, which don’t, and adjusting accordingly.
Why Did the Government Block the Merger?
The FTC (Federal Trade Commission) + 9 state attorneys general sued because they believed:
- Less competition → higher grocery prices for shoppers
- Less competition for workers → lower wages, fewer benefits
- The combined company would be too dominant in too many markets
A federal judge agreed and issued a preliminary injunction on December 10, 2024, effectively killing the deal.
The Legal Fight Isn’t Over
Even after the merger died, the two companies are suing each other:
| Party | Claim |
|---|---|
| Albertsons | Wants a $600 million termination fee from Kroger |
| Kroger | Says it doesn’t owe the fee; accuses Albertsons of undermining the regulatory process |
| Albertsons | Denies Kroger’s accusations |
Summary
- Safeway/Albertsons is closing stores after its $24.6B merger with Kroger was blocked by the FTC
- 35 stores closed in fiscal 2025 — more than triple the prior year
- Closures cost $63.4M in lost sales and $45.1M in exit costs
- But the company also opened 9 stores and remodeled 94, investing $1.83B total
- Employees are being offered transfers where possible
- Litigation continues between Albertsons and Kroger over a $600M breakup fee
FAQ
1. Why did the FTC sue to stop the merger?
The FTC argued the merger would reduce competition, leading to higher prices for shoppers and worse conditions for grocery workers. A federal judge agreed.
2. Is my local Safeway closing?
Albertsons hasn’t released a full list. Known 2026 closures are in Hayward, CA; Newport, OR; and Washington, D.C. Check local news or the store directly.
3. Will employees lose their jobs?
Albertsons says it’s trying to place affected workers at other nearby locations. No mass layoffs have been announced.
4. Is Albertsons going out of business?
No. The company still operates 2,244 stores across 35 states + D.C., employs ~280,000 people, and is actively investing in remodels, new stores, and technology.
5. What happens next with Kroger and Albertsons?
They’re suing each other in Delaware court over a $600M termination fee. That legal battle is separate from the store closures.