Albertsons, the grocery chain, is in trouble. In December 2024, federal and Washington state court rulings blocked its proposed $24.6 billion merger with Kroger, leaving Albertsons to compete on its own in a highly competitive, volatile business. Nearly two years later, the problems have not disappeared. In its October 13, 2026 earnings release, Albertsons reported a 0.8% decline in identical sales, $52 million in quarterly net income and a comprehensive business review intended to accelerate its turnaround.
Albertsons executives state that a remedial, resuscitative plan is underway. The company is simplifying its structure, reducing costs, reinvesting in prices, improving stores and expanding its own brands and digital capabilities. These actions may improve performance. But, do they add up to a strategy for quality revenue growth leading to profitable, enduring growth? Or, are they activities designed to make the brand a more attractive purchase? As The Wall Street Journal reports, Albertsons is examining strategic alternatives, including potential transactions. A sale is possible. It is not a declared certainty.
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The revival “strategies” discussed during the earnings call are, for the most part, tactics. Tactics are the activities designed to execute a strategy. Cost reductions are tactics. Organizational simplification is a tactic. Price investments are tactics. Digital improvements are tactics. Important tactics, perhaps. But, what is the overarching brand strategy? If the only answer is to prepare the business for sale, Albertsons is managing toward a transaction rather than toward a customer.
However, and here is the crux: just what is Albertsons’ market?
Something missing from the earnings call is a compelling articulation of what relevantly differentiates Albertsons from its competition. Chief Executive Officer Susan Morris said the company’s goal is not to be the cheapest grocer in town. Instead, she described a balanced value proposition, shaped by local markets, quality, variety, services and convenience. This is sensible. But, it is not yet the answer to why a customer should prefer Albertsons rather than any other acceptable alternative. Price is only one component of consumer-perceived value.
Since earnings calls are the epitome of “vague but specific” statements, it is difficult to know exactly what Albertsons is thinking about its brand experience. A comprehensive business review may discover the answer. But, before Albertsons decides what assets to keep, what prices to change or what stores to close, the company needs to know which customers it exists to serve and which wants it intends to satisfy better than alternatives.
This is not the same question the Federal Trade Commission and the courts had to answer when considering the Kroger merger. The FTC challenged the transaction because of concerns about competition in supermarket retailing and local markets. Those are legitimate antitrust questions. They are not, however, a substitute for Albertsons defining its market from the customer’s perspective. A definition appropriate for merger enforcement is not necessarily the definition required for brand revitalization.
Look at the national market-share rankings. According to Numerator data reported by Supermarket News, Walmart commands approximately 20.3% of food-and-beverage spending, with Costco and Kroger at roughly 8.3% each, Albertsons at 4.5% and Publix at 4.1%. These numbers help describe the industry. But, are they the best way to define the market in which Albertsons must win?
Is Albertsons in the same market as Walmart? Does Albertsons compete with Costco? With Aldi? With Amazon and Whole Foods? Of course, customers may shop at more than one of these brands. The issue is not whether these businesses sometimes compete for the same grocery dollars. The issue is whether they satisfy the same want for the same customer in the same context.
If this broad category is the only way Albertsons understands its market, then Albertsons is likely to lose. It will be tempted to compete against everyone on everything: price, selection, convenience, experience and scale. No brand can be the preferred choice for everyone for every occasion.
If Albertsons is worth saving, define the market first.
What Is A Market?
A market is people with a want. If it is a global want, there is a global market. If it is a growing want, it is a growing market. If some people in Italy, some people in France and some people in Australia share the same want, then they are in the same market. It just happens that they live in different places. If there is no want, there is no market. If there is no want for Albertsons, there is no market for Albertsons. But, what if there is a want for Albertsons and its leaders have not clearly identified that want?
A market is not a product category. There is no lip gloss market; there is no mascara market. There are wants for attractiveness, youthfulness, status and elegance. There is no such thing as the automotive market when viewed through the customer’s needs. There are wants for family transportation, freedom, security, prestige and enjoyment. There is no granola bar market. There is a market for portable, quick, easy-to-eat nutrition. There is a market for an afternoon pick-me-up. There is a need for portable protein before or after strenuous activities.
There is no single grocery market from the customer’s perspective. There is a market for a hyper-local, neighborhood food store. There is a market for an extraordinary service food store such as Wegmans. There is a market for a food store where culinary discovery is part of the experience. There is a market for the weekly family stock-up. There is a market for tonight’s dinner when no one has time to cook. These are different wants, different contexts and often different competitive sets.
A market is a want. As Branding Strategy Insider has argued before in A Market Is A Want, brands should be designed for people with needs, not for the convenience of category labels.
A market is not a geography. Geographies are where markets exist. Geographies are how you organize to deliver a brand promise to the market. A neighborhood matters enormously to a grocer. But, a ZIP code does not tell Albertsons why someone chooses one food store over another. Proximity can make a brand possible. Proximity alone does not necessarily make it preferred.
A market is not a distribution channel. A distribution channel is how you reach the market, not the definition of the market. There is no such thing as the warehouse store market or the supermarket market in the sense that customers define their wants by an industry channel. The difference between channels and markets is a critical distinction for any brand attempting to grow.
Brands may choose different ways to deliver experiences. A customer may shop online, visit a neighborhood store, buy in bulk or use curbside pickup. The customer may do all of these things in the same week. Consumers want the ease of choice when it comes to how brands are bought and delivered. However, it is the brand with its benefits that the consumer purchases. Channels deliver the experience. Channels do not define the want.
A market is a specific group of people who share common needs in a common context. Product categories, channels and price categories are not market segments. Albertsons operates under many local banners, including Safeway, Vons, Jewel-Osco and ACME. The company should not assume that these banners have identical customers, identical occasions or identical reasons for preference. The right market definition may vary across the portfolio. But, it must always begin with the customer.
For example, specific shoppers go to Amazon for specific products that satisfy specific needs. A person may need an 8-foot replacement lamp cord. Or, a person may want thermal pants. It is doubtful that an Amazon shopper says, “I am looking for an e-commerce site or an online marketplace.” Online marketplaces are where the goods exist. The marketplaces are not what the goods are good for.
What Is A Competitive Set?
Within a market, there are brands that satisfy the customer’s want. Customers decide which brands make up their competitive set for the specific occasion. The competitive set is not simply the list of companies that management places on a presentation slide. It is the alternatives the customer would genuinely consider.
A customer looking for a vehicle to shuttle kids and their friends from one after-school activity to another may have a competitive set of a minivan, an SUV with three rows of seats or a station wagon. A customer planning a special dinner might consider Wegmans, Whole Foods, a local butcher and a restaurant. A customer shopping for a full week of family meals might think about Albertsons, Walmart or Costco. The competitive set changes with the want and the context.
It is doubtful, but completely possible, that Aldi and Albertsons are in the same competitive set for one customer and one occasion. It is also doubtful, but anything is possible, that Walmart and Albertsons are not considered alternatives for a particular need. We should not decide this in the boardroom. We should ask the customer. This is the reason to conduct a market structure audit: identify the needs, contexts, brands considered and choices actually made.
Research stretching back decades indicates that customers typically consider a short-list of brands. This is the small set of acceptable alternatives, often three or four, from which a customer may choose. Only customers can tell Albertsons which brands belong on that short-list in any given shopping circumstance. And only customers can tell Albertsons which brand they prefer.
Albertsons must be on the customer’s short-list. But, being on the short-list is insufficient. Being considered means Albertsons is an acceptable alternative. Being preferred means Albertsons is the customer’s first choice. This distinction is fundamental. Brand preference is stronger than satisfaction.
A customer may be very satisfied with Albertsons and also very satisfied with two or three alternative brands. When satisfaction is roughly equal, the decision to purchase or visit is frequently determined by price and convenience. Satisfaction is necessary but not sufficient. Preference is relative. Albertsons must aim to be the preferred brand in the competitive set that matters to its chosen customers.
This is also why relevant differentiation matters. Customers do not need another retailer claiming freshness, value, convenience, selection and service. Most large grocers can claim those things. The question is which combination of benefits, delivered consistently and credibly, makes a particular brand uniquely meaningful. As BSI observed in its analysis of Amazon’s grocery blind spot, technology and operating features are not the same as a relevantly differentiated customer benefit.
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There are grocery brands in the United States that are beloved. Schnucks, Woodman’s Markets, H-E-B, Market Basket, Wegmans and Piggly Wiggly are examples of businesses with deeply local or regional identities. These brands win because they create reasons to be chosen. They demonstrate, in different ways, that a food store can be more than a place with aisles and shelves.
What should Albertsons do? Start with the customer. Determine which wants are growing, which needs remain inadequately satisfied and which occasions matter most. Identify the true competitors for those occasions. Determine where Albertsons and its banners are on the customer’s short-list and where they are preferred. Identify what the brands can credibly deliver better than alternatives. Then create a strategy. Then select the tactics.
The company can still simplify operations, improve its cost structure, strengthen its own brands and invest in stores. Those actions may be necessary. However, cost savings should fund a more relevant customer experience, not become the brand strategy. Market share is a result. Preference is a cause. Albertsons needs to know what it must do to become the customer’s first choice before it decides how much efficiency is enough.
All of the stated tactics in the latest Albertsons earnings call may make Albertsons a more palatable purchase in the mergers-and-acquisitions world. Knowing what is Albertsons’ market, what is Albertsons’ competitive set and among whom Albertsons is the preferred brand would make the company a better deal. Or, it might make Albertsons worth revitalizing and rebuilding rather than selling.
Rather than organizing the future around a possible sale, Albertsons should do its homework and define its market and competitive set. This approach requires people who are passionate about the Albertsons brand; people who want to restore the brand; people who want the brand to live. Brands can live forever if properly managed. But, first, leaders must know what their brand is for, whom it serves and why it deserves to be preferred.
Contributed to Branding Strategy Insider by Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
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