It’s never a good sign when a company pulls its financial forecasts mid-turnaround.
But Albertsons did just that on Tuesday in the first clear sign of how deeply newly appointed executive chair Meg Whitman plans to overhaul the struggling grocery chain.
Albertsons—which, in addition to its namesake stores, operates another 21 chains including Safeway, Vons, Jewel-Osco, Tom Thumb, and Randalls—said that net sales slipped to $18.9 billion in its second fiscal quarter, led by a 0.8% drop in identical sales, a metric that strips out newly closed or open stores. It was the second quarterly drop in a row, following shrinking growth in the preceding quarter.
Albertsons CEO Susan Morris announced a plan in July called “ACI Edge,” aimed at improving the company’s competitiveness by reviewing its strategy, cost structure, operations, and portfolio of brands. On Tuesday, the company said it was pulling its financial forecasts until that review is over. That suggests that Albertsons may be eyeing a deeper turnaround than initially planned under Whitman, the longtime tech executive who joined Albertsons last month.
“Everything should be on the table,” Whitman told Wall Street analysts on Albertsons’ quarterly conference call. “Dramatic improvement is needed now. Albertsons must move faster to change the trajectory of the business.”
Like all grocers, Albertsons has been struggling with cash-strapped shoppers burdened by food inflation and higher gas prices cutting into their spending on nonessentials. But Albertsons also has a cost structure higher than that of its rivals, leaving less room to maneuver and shield consumers from higher prices than discount grocers like Walmart and Kroger or bulk operators like Sam’s Club and Costco.
While Whitman has no grocery experience and little retail experience (from her time as CEO of eBay), she was brought in by Albertsons for her turnaround chops and decisiveness.
After taking the reins at Hewlett-Packard in 2011, she would go on to simplify the structure and product portfolio of a company that had been damaged by its acquisition of Autonomy Corp.; was doing strategy flip-flops; and had suffered from declining revenue and margins. She oversaw the split of the company into two.
Before that, she had been CEO of eBay, where she professionalized the management structure and operations of a hot tech startup, setting it up for a period of fast growth under her decade of management.
The current period of food inflation has been particularly bruising for Albertsons. Its lower-income customers are trading down to less expensive items and store brands, which either pinches Albertsons’ margins or sends shoppers to Walmart and Kroger. “The reality right now is that the economy is tough for many of our customers,” Morris said.
But Albertsons’ sprawling empire of store chains has led to complex operations and the higher costs that come with them, making it harder to be more flexible on pricing.
Calling Albertsons’ prices “ridiculously high compared to rivals,” GlobalData managing director Neil Saunders said that would “be partly justifiable if other dimensions—store experience, service, private label, and so forth—were above par, but they’re not.” To remedy that, he added, Albertsons would need to “invest in prices”—retail speak for “lower them.” And that in turn adds pressure to find cost savings.
Whitman’s comments to analysts suggest there will be no sacred cows under her aegis. She hinted that Albertsons could shed some brands through “potential strategic actions.”
Morris became CEO in 2025 after the collapse a few months earlier of the planned $24 billion Albertsons and Kroger merger was followed by the exit of both companies’ chiefs. (Albertsons is currently suing Kroger for $9 billion over the failure of the merger.) She had been operations chief for seven years.
Before Whitman’s appointment, Morris had already made some moves to make Albertsons more flexible, including lowering the number of operating regions to four from 11 to generate economies of scale and speed up decision-making. She also centralized much of Albertsons’ merchandising decisions under one team.
As executive chair rather than simply chair, Whitman’s role is much more hands-on, acting as a close operations and strategic advisor to Morris and helping leadership sharpen strategy, improve execution, and act with celerity.
“The company has greater potential than its results have reflected,” Whitman said. “But dramatic improvement is needed now. I believe we will turn the corner.”
This story was originally featured on Fortune.com