Soon after revealing a dip in sales for the second quarter of 2026, U.S. grocery chain Albertsons is in court seeking around USD 8 billion (EUR 7.1 billion) from fellow retailer Kroger over the failure of their proposed USD 24.6 billion (EUR 22 billion) merger.
In court filings ahead of a trial that began 19 October, Albertsons claimed that Kroger failed to honor its contractual commitment to do everything required to secure regulatory approval, including prioritizing its own financial objectives over the merger’s proposed store-divestiture package and refusing to sell additional assets that might have improved the chances of approval, per Forbes.
Kroger, for its part, maintains that it pursued the transaction in good faith.
The trial began shortly after Albertsons announced its Q2 earnings, in which identical sales decreased 0.8 percent year over year.
”Although our second quarter performance was in line with the expectations in our revised outlook, our results do not reflect the potential of the company,” Albertsons CEO Susan Morris said in a release. ”We are launching a comprehensive business review to speed up improvements in Albertsons' performance and tackle even harder a cost structure we can no longer afford.”
During a recent call with investors, Morris also referenced cost-cutting and streamlining measures coming down the pipeline, including layoffs, Associated Press reported.
“We did some work last year and saw a substantial reduction in headcount, but quite frankly, there’s more to be had,” Morris said. “You’ll see us taking aggressive action there in the next 12 to 18 months, as well.”
Meanwhile, Kroger also recorded largely stagnant Q2 results, reporting an identical store sales increase of only 0.2 percent in the three-month period.
The chain has also announced layoffs and is planning to cut 3,000 corporate employees over the next three years as it ramps up its use of artificial intelligence, per the Associated Press.
“Technology is reshaping what’s possible. The way work gets done is changing across every industry; we must adapt and take advantage of technology,” Kroger CEO Greg Foran wrote in a memo to employees. “We need to adopt capabilities, reduce duplicative work, and look closely at where work is best fit to be done.”
