Albertsons gets a big boost from AI during Q3

Albertsons on Wednesday said it got a big payoff from new artificial intelligence platforms during its third quarter. But the grocer reported some worrisome softness from middle-income shoppers – a trend it hadn’t noted before.

For the quarter ended Nov. 29, 2025, Boise, Idaho-based Albertsons said same-store sales increased 2.4%, driven largely by growth in pharmacy. Digital sales were up 21%. Net sales rose 1.9% to $19.1 million for the period.

But AI appeared to be the star of the quarter, and of the grocer’s future, Supermarket News reports.

“We’re not just adopting AI, we’re working to scale it across the enterprise to fundamentally change how we operate and how customers experience Albertsons,” Susan Morris, Albertsons’ CEO, told analysts, according to a transcript from financial services site AlphaSense. “This is not incremental. It’s designed to be a step change in speed, intelligence and personalization.”

Albertsons is deploying AI tools across multiple business segments, including digital customer experience. A new AI search function drove a 10% increase in basket size among users, Morris said, noting her expectation that revenue will grow alongside adoption.

The grocer said it is also deploying generative AI to optimize labor forecasting and scheduling, a move that is expected to reduce labor costs.

AI is also being used to improve inventory forecasting to reduce out-of-stock issues.

Morris said the company continues to gain market share in its digital and ecommerce business, with penetration now at 9.5%. During the third quarter, more than half of Albertsons’ grocery orders were delivered in three hours or less.

Pharmacy drove much of the company’s growth during the quarter, with Albertsons becoming the market leader in immunizations, she said.

Loyalty membership grew 12% during the period, to more than 49 million members.

But consumers remain pressured.

“At the low end, shoppers are clearly stretched, putting fewer items in the basket each trip and prioritizing essentials while visiting more frequently as they manage cash flow,” Morris said. “Middle-income households, which have been relatively resilient, are showing some signs of softening, with increased price sensitivity and trade-down behavior emerging in certain categories at the high end.”

This is leading to cautious discretionary spending, she added, noting that Albertsons is focusing on personalized promotions, loyalty enhancements and the “surgical management of cost inflation” to keep those shoppers coming back.

As of the end of the third quarter, Albertsons operated 2,243 retail stores, with 1,708 in-store pharmacies and 404 fuel centers. The grocer operates stores in 35 states and Washington, D.C., with a portfolio that includes banners such as Albertsons, Safeway, Vons, Jewel-Osco and many more.