Albertsons sues Kroger for about $8 billion over failed $24.6 billion merger, both sides push ahead with layoffs
U.S. grocery chain Albertsons, after same-store sales fell 0.8% in the second quarter of 2026, is seeking about $8 billion from Kroger over the failure of their $24.6 billion merger, with the case going to trial on October 19; Kroger plans to cut 3,000 corporate employees over the next three years.
U.S. grocery chain Albertsons, after reporting its second-quarter 2026 results, has sued fellow retailer Kroger for about $8 billion (about 7.1 billion euros) over the failure of their proposed $24.6 billion (about 22 billion euros) merger. The case went to trial on October 19.
According to Forbes, Albertsons argued in pre-trial court filings that Kroger failed to fulfill its contractual obligation to take all necessary steps to secure regulatory approval, specifically by putting its own financial targets ahead of the proposed store divestiture package for the merger and refusing to sell additional assets that could have improved the chances of approval. Kroger maintains that it pursued the deal in good faith.
The trial opened immediately after Albertsons released its second-quarter earnings, which showed same-store sales fell 0.8% year on year. Albertsons CEO Susan Morris said in a press release: "While our second-quarter performance was in line with the expectations in our revised outlook, our results do not reflect the company's potential. We are launching a comprehensive business review to accelerate the improvement of Albertsons' performance and to address more aggressively the cost structure we can no longer afford."
According to the Associated Press, Morris also mentioned upcoming cost-cutting and streamlining measures, including layoffs, on a recent call with investors. "We did some work last year and headcount came down significantly, but frankly, there is more room to cut," she said. "Over the next 12 to 18 months, you will see us take aggressive action on this front."
Meanwhile, Kroger's second-quarter results were largely stagnant, with the company reporting same-store sales growth of just 0.2% for the quarter. According to the Associated Press, the chain has also announced layoffs and plans to cut 3,000 corporate employees over the next three years while stepping up its use of artificial intelligence.
Kroger CEO Greg Foran wrote in a memo to employees: "Technology is reshaping what is possible. The way work gets done is changing across industries; we must adapt and harness technology. We need to adopt new capabilities, reduce repetitive work and take a careful look at what work is best done where."