Kroger Closing Stores in Virginia, Wisconsin, Illinois and 8 Other States After Failed $24.6 Billion Merger

Kroger is moving forward with plans to close 60 underperforming grocery stores over the next 18 months, a decision that comes months after federal and state judges blocked its proposed $24.6 billion merger with Albertsons. The Cincinnati-based retailer said the closures would deliver a “modest financial benefit,” even as it continues operating more than 2,700 supermarkets nationwide.

The merger, first proposed in 2022, would have been the largest supermarket deal in U.S. history. Kroger and Albertsons argued that joining forces would help them compete with Walmart, Costco and Amazon. Instead, the agreement stalled after legal challenges from regulators and state attorneys general, leaving Kroger to recalibrate its strategy.

Now, the nationwide store closures are beginning to take shape across nearly a dozen states. Reports indicate shutdowns planned in Georgia, Illinois, Indiana, Kentucky, Maryland, North Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin, with Virginia expected to see the highest number so far.

The Merger That Never Materialized

The Federal Trade Commission formally sued to block the acquisition in February 2024, calling it anticompetitive. In its complaint, the agency alleged the merger would eliminate “fierce competition” between the two chains, leading to higher grocery prices and reduced quality for consumers.

Henry Liu, director of the FTC’s Bureau of Competition, said at the time that the deal would “lead to additional grocery price hikes for everyday goods,” adding that grocery workers could also see diminished wages and benefits if the companies combined. A bipartisan coalition of attorneys general joined the lawsuit.

In December 2024, two judges halted the merger. U.S. District Court Judge Adrienne Nelson issued a preliminary injunction blocking the deal in federal court, while a Washington state judge separately ruled it would violate state consumer-protection laws. The decisions effectively froze the transaction, though the companies said they were reviewing their options.

Where Stores Are Closing

With the merger off the table, Kroger has turned inward, reviewing store performance across its portfolio. During its first-quarter earnings call, the company confirmed plans to shutter 60 locations, recording a $100 million impairment charge tied to the closures.

According to Supermarket News, closures are already being reported across 11 states. In Virginia alone, five stores are set to close, including locations in Charlottesville and Abingdon. Additional closures are planned in West Virginia and Tennessee, with more expected in Illinois, Maryland and North Carolina.

Labor unions have voiced concern. United Food & Commercial Workers Local 400 President Mark Federici said communities “will suffer” from the shutdowns, arguing that rural areas may have few alternatives for grocery access. He also questioned the practicality of transferring displaced workers to other stores, noting that travel distances could make relocation unrealistic.

A Reset for the Grocery Giant

Kroger’s leadership says the closures are part of a broader reset. Interim Chairman and CEO Ron Sargent told analysts the company had paused store evaluations during its two-year merger pursuit and is now resuming a sharper focus on operational performance. The retailer plans to reinvest savings from the 60 store closures into improving the customer experience, while continuing store remodels and new openings in select markets.

Financially, Kroger reported first-quarter identical-store sales growth of 3.2%, excluding fuel, with ecommerce sales rising 15%. Adjusted operating profit increased modestly even as net income declined year over year, reflecting shifting consumer behavior. Executives noted shoppers are making more frequent trips, spending less per visit and leaning more heavily on private-label brands and promotions.

The failed merger remains central to the company’s recent trajectory. Regulators argued that combining Kroger and Albertsons would reduce competition and harm consumers and workers, while Kroger maintained that the deal would strengthen its competitive position against national retail giants. With the transaction halted and store closures underway across multiple states, Kroger is now moving forward independently, reshaping its footprint as it navigates a competitive and closely watched grocery landscape.