Albertsons centralizes merchandising under new ACI Edge operating model

Albertsons is also No. 736 in Digital Commerce 360’s all-new AI Rankings. That set of rankings is available in the Top 1000 Pro with AI Database.

How the Albertsons ACI Edge merchandising model works

Morris said the ACI Edge model “combines the scale and capabilities of a national retailer with the accountability and local focus that have long distinguished our banners.”

Each of the four regions will include local markets that focus on strengthening customer connections, supporting stores and driving results in their communities, according to the announcement.

Albertsons’ four consolidated regions are:

• California Region. This includes the Southern California and Northern California markets.
• West Region. This includes the Mountain West, Portland and Seattle markets.
• South Region. This includes the Southwest, Southern and United markets.
• East Region. This includes the Jewel-Osco, Mid-Atlantic and Shaw’s markets.

On Albertsons’ Q1 earnings call, Morris said the ACI Edge model “also extends beyond the operating model. With more than 2,200 stores and tens of millions of loyalty households, our data and AI capabilities increasingly allow us to personalize the individual customer experience.”

She said “proven” Albertsons executives will lead each region. And as ACI Edge matures, she said, Albertsons expects it to generate $200 million in incremental annual run rate benefits. Savings will build through its fiscal 2026, but Albertsons will realize the majority of savings in fiscal 2027, she added.

Albertsons also expects about $50 million in transition costs over that period, she said.

Connection to Merch United strategy

This ties into the next step in Albertsons’ Merch United merchandising model, it said in the announcement. It said Merch United “combines the buying power, data and analytics of a national retailer with the customer focus and local insights of Albertsons Cos.’ market teams.”

Albertsons said it’s advancing Merch United by centralizing center-store merchandising. It is also bringing the following under a single enterprise team:

• Customer insights
• Supplier relationships
• Strategy
• Product
• Placement
• Promotion
• Price

“Center-store centralization is an important next step in Merch United and in how we build a stronger, more connected merchandising organization,” said Michelle Larson, chief merchandising officer, in the announcement. “By bringing center-store work together at the enterprise level, we can better leverage our scale, strengthen supplier partnerships and create more capacity for our regional and market teams to focus on fresh, local and the customer needs that make each community unique.”

Albertsons said fresh merchandising decisions will remain in the markets. They also will continue to receive guidance from the Merch United strategy, it said.

Albertsons noted that it does not plan to “realign” stores or districts as part of the operational transition. It said its banners will “continue serving customers with the local identity, history and community connections that have made them trusted shopping destinations.”

Ultimately, Albertsons said, a simpler structure combined with the retailer’s artificial intelligence (AI) capabilities will help teams respond faster to customer needs, improve in-stock performance and deliver “a more consistent experience across stores and digital channels.”