Safeway Shuts More Stores as Albertsons and Other Grocery Chains Continue Closures

As grocery prices remain a persistent concern for consumers, another issue is steadily reshaping neighborhoods across the United States: the closure of local grocery stores. The trend spans full-service chains and discount retailers alike, narrowing options in both urban and suburban markets and intensifying scrutiny of an industry that typically operates on net profit margins of just 1 to 3 percent.

During its June 2025 earnings call, Kroger announced plans to shutter 60 locations over the following 18 months, citing underperformance. The closures affect multiple brands under the Kroger umbrella, including Fred Meyer, Fry's Food and Drug, Harris Teeter, Foods Co, Food 4 Less, King Soopers, Mariano's, Pick 'n Save, and QFC.

Consumers who have turned to discount grocery stores for relief from higher food costs are also seeing options disappear. Aldi is closing stores in 2026 across Minnesota, Illinois, Texas, and Wisconsin, even as the chain pursues a broader expansion plan to reach 3,200 locations by 2028. Cutting underperforming stores is part of that growth strategy.

Grocery Outlet, another discount chain, announced in March 2026 that it would close 36 locations. CEO Jason Potter acknowledged that the company had stretched itself too thin through rapid expansion. Of the 36 stores slated for closure, 24 are on the East Coast, reducing discount grocery options in those communities.

Traditional grocers are also facing mounting competitive pressure from the largest players in the sector. Walmart, which generates more grocery revenue than any U.S. retailer, and Costco have leveraged scale and supply-chain efficiencies to undercut conventional supermarket pricing, while Amazon's Whole Foods and the rapidly expanding dollar store channel — Dollar General and Dollar Tree together operate tens of thousands of locations nationwide — continue to reshape where Americans buy food.

Safeway Shuttering Long-Standing Locations

Safeway has now joined the list of chains reducing its footprint, closing several stores that had served their communities for decades.

The most recent closure was in Newport, Oregon, at 2220 N Coast Hwy, a store that had served locals for 30 years before closing its doors in July. This followed the shutdown of the Hechinger Mall location in Washington, D.C., at 1601 Maryland Ave NE, which had operated for 40 years before closing on May 16. Earlier, the Hayward Safeway at 231 W Jackson St. in California's Bay Area closed in February 2026.

"Like all retailers, we are constantly evaluating our store footprint and have to look at every angle of the business. This includes our real estate portfolio. We are coming to the end of our lease at this location, and have made the decision to reinvest our resources into other existing stores," Safeway said in a statement regarding the Washington, D.C. closure.

The closures are part of a broader strategic shift by Safeway's parent company, Albertsons. Thirty Albertsons locations closed in 2025, and an additional 12 are scheduled for closure in 2026.

"We're continually looking at our store base and making decisions on whether to keep the stores or can we turn them around, can we change the profitability or making the difficult decisions from time to time to exit those stores. And we've not seen a dramatic shift or increase in store profitability at this time. Again, it's a pretty small number of our fleet," CEO Susan Morris said during the company's first-quarter earnings call.

The backdrop to these closures includes the failed merger between Kroger and Albertsons. Kroger attempted to acquire Albertsons for $24.6 billion in October 2022, but the Federal Trade Commission blocked the deal in February 2024. Albertsons subsequently sued Kroger, alleging it had not done enough to secure regulatory approval, and Kroger countersued. The lawsuits remain ongoing. The FTC's challenge of the merger reflected a broader enforcement posture under Chair Lina Khan, who has pursued aggressive antitrust action across multiple industries.

Impact on Consumers and Communities

For the companies, closing underperforming locations is a financial and operational decision. For the consumers who have relied on these stores for decades, the consequences are more immediate. Each closure eliminates a full-service grocery option from the surrounding neighborhood, a particularly significant loss in areas with few alternatives.

The Washington, D.C. and Newport, Oregon Safeway stores had both operated long enough that residents had built shopping habits, transportation routines, and in some cases food-access dependence around them.

The Hayward closure marks the fourth Bay Area Safeway to shut down in just over a year, following earlier shutdowns in San Francisco's Fillmore district, Pinole, and Vallejo. When multiple stores in the same metro area close in succession, remaining locations absorb increased shopper traffic — longer lines, thinner inventory — and some pockets of the region become genuinely underserved.

The U.S. Department of Agriculture has long tracked low-income, low-access areas — commonly called food deserts — where residents live more than a mile from a supermarket in urban settings or more than ten miles in rural ones. When a long-standing store closes in such an area, residents may face increased reliance on convenience stores and dollar stores that typically stock limited fresh produce and carry higher per-unit prices.

Safeway Store Closures in 2026 (So Far)

• 231 W Jackson Street, Hayward, CA
• 1601 Maryland Ave NE, Washington, D.C.
• 2220 N Coast Highway, Newport, OR

Despite the disruption to shoppers, there has been one mitigating factor. All 76 employees at the Hayward store were transferred to nearby locations rather than laid off, consistent with the union's collective bargaining agreement. This pattern has held across most of Safeway's other closures. Albertsons stated that it works "to place as many associates as possible in other stores."

This story was originally published by TheStreet on August 11, 2026.