What’s next for Albertsons? New CEO Susan Morris faces questions post-merger
AI-generated summary reviewed by our newsroom.
- Albertsons posted gains in identical, digital, pharmacy and loyalty sales for Q1.
- New CEO Susan Morris emphasized tech investments and cost controls post-merger.
- Jobs shift offshore as Albertsons outsources roles to tech center in India.
Albertsons emerged from its failed union with Kroger with a chip on its shoulder.
But its new CEO, Susan Morris, painted a rosy picture of the Boise-based company’s future during a quarterly earnings call with investors on Tuesday.
In her first earnings call since taking over the top position from Vivek Sankaran in May, Morris said the supermarket chain delivered “solid operating and financial performance” while investing in operations and improving customer value.
She acknowledged inflationary pressures, saying the company is starting to see increases in the cost of goods. Morris added that Albertsons is prepared to look for alternate suppliers if tariffs “become unwieldy.”
In late March, just before President Donald Trump announced his “Liberation Day” tariffs, the grocer sent a letter telling suppliers to eat the cost of any related price increases. It told suppliers that if they wanted to raise prices, they would have to get permission first.
“We’ve got a very rigorous process of, first and foremost, quite frankly, just pushing back,” Morris said Tuesday in response to a question from an investor. “We’ve worked hard, and it showed in our price position as well that we’ve not passed through all of the inflation that we’re seeing from a cost of goods perspective. In certain cases, if we have to, we’ll pass them on to customers.”
Company looks to cut labor costs
Sharon McCollam, the president and chief financial officer of Albertsons, said during the call that one of the biggest areas of productivity gains that the company expects to see this year relates to outsourcing work overseas where labor is cheaper.
McCollam touted the company’s new headquarters for technology in India and said Albertsons is also transitioning many of its back-end accounting functions to an existing location that she did not specify.
The company told The Times of India that it plans to hire as many as 1,000 people in the next 18 months to work at the digital hub in Bengaluru. The move follows domestic layoffs that began in January, with hundreds of employees at sites in Idaho, California and Arizona losing their jobs, BoiseDev reported.
“We are making several — we call it internally, ways of working — moves that are helping to offset some of the pressure that we’re seeing in wages,” McCollam said. “I don’t want to specifically say union wages. It’s wages in general.”
Union negotiations progress
Morris mentioned on the call that the company has reached an agreement with the United Food and Commercial Workers union representing Albertsons workers in Southern California and Colorado. She said the contracts would meaningfully improve wages and benefits.
In June, hundreds of workers at Albertsons stores in the Boise and Nampa area voted overwhelmingly to authorize a strike, saying that the company committed multiple unfair labor practices, including threatening to fire an employee involved in bargaining. Albertsons denied the allegations.
The grocery giant has 5,000-5,999 employees at stores, its Boise headquarters and other sites. The company was founded by Joe Albertson in 1939 with a single store at 16th and State streets in Boise.
Morris said on Tuesday that she’s “very excited” about the company’s future.
“Our customers-for-life strategy is working,” she said in her closing remarks. “With just over two months as CEO of Albertsons company, let me say that I am more confident in our strategy with each day.”
Earnings release shows sales growth
Albertsons reported an increase of 2.8% in identical sales, 25% in digital sales, 20% growth in pharmacy and 14% in loyalty program membership for its latest quarter that ended June 14. The surge in identical sales was primarily driven by the growth in pharmacy sales, according to the company.
Morris said the company’s e-commerce business is near break-even and improving.
“Our technology-first focus is positioning us to make a greater impact faster, allowing us to drive greater innovation at a lower cost,” she said. “Driving transformational productivity is our next priority, which is an imperative to fuel our growth.”
This story was originally published July 15, 2025 at 3:55 PM with the headline "What’s next for Albertsons? New CEO Susan Morris faces questions post-merger."
