Behind Albertsons' AI and Tech Transformation

On the heels of a solid Q3 earnings report, Albertsons Cos. is touting technology and AI as the main drivers behind its successful transformation and planned long-term competitive advantage. As CEO Susan Morris shared during this week’s earnings call, the grocer is using tech and AI throughout its operations, from optimizing labor to enhancing the customer experience across the omnichannel. 

“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,” Morris said. “This is not incremental. It's designed to be a step change in speed, intelligence and personalization. Our teams are energized, and our foundation is strong. Our strategic priorities are clear.”

Transformational Imperatives

According to Morris, Albertsons’ transformational “big bets” cover four critical areas:

1. Digital Customer Experience

Morris calls the digital customer experience a critical pillar of Albertsons’ growth strategy. By leveraging AI, she explained, the company is able to create differentiated experiences “that go beyond convenience.” Albertsons’ new Ask AI search capability, for example, is already delivering a 10% increase in basket size for users.

In early December, the grocer officially launched its new AI shopping assistant that promises to make grocery shopping faster, smarter and more personalized. The AI experience, now available on all Albertsons banner websites as Albertsons AI, Safeway AI, Vons AI, Jewel-Osco AI and more, is powered by OpenAI models and aims to reduce grocery shopping time from about 45 minutes to as little as four minutes. 

“This AI-powered assistant enables customers to interact in natural language, receive personalized recommendations and build smarter baskets faster,” Morris explained. “Whether they're planning meals, discovering new products or shopping for specific occasions, this innovation enhances convenience for our customers while strengthening our competitive advantage by leveraging rich data to optimize marketing, improve loyalty and unlock new monetization opportunities through our Media Collective.”

2. Merchandising Intelligence

According to Morris, Albertsons will equip its merchants with “AI-driven insights and automated execution to optimize pricing, promotions and assortment decisions,” with the aims of helping transform category management and driving margin improvement. 

“Our vision is a future where intelligent automation guides these decisions, freeing our people to focus on strategy and innovation,” she further explained. “Our ambition is for customers to truly feel seen, to reliably find the essentials they need at prices they trust, while also discovering unique, inspiring items that make our stores a destination and eliminate the need for a trip elsewhere.”

3. Empowering and Managing Labor

Albertsons is actively deploying generative AI to optimize labor forecasting and scheduling across its retail labor model, which has helped reduce costs while also improving associate experience. 

“By leveraging AI, we ensure the right associates are in the right place at the right time, which not only drives productivity, but also elevates customer service,” Morris said. “This transformation simplifies complex scheduling tasks, frees up associates to focus on the customer and positions us to deliver consistent execution across thousands of stores.”

Additionally, Albertsons said in November that in 2026 it will roll out a robust associate skilling initiative through a partnership with Microsoft. That initiative includes:

• Copilot immersion experiences and prompt coaching for all licensed users at the company in roles across corporate, retail, supply chain and manufacturing teams
• Unlimited certifications across Microsoft 365, Dynamics, PowerApps and other Microsoft tools
• GitHub Copilot training for developers

4. Optimizing the End-to-End Supply Chain

Finally, Morris said that AI demand forecasting is central to Albertsons’ supply chain transformation, since it enables the company to precisely track products from vendor to customer. “By applying advanced analytics and computer vision, we're improving forecasting accuracy, fulfillment, quality and on-shelf availability, optimizing labor and inventory while ensuring that customers can find the products they need, when and where they need them,” she said.

“In sum, our tech and AI are designed to be scalable enterprise-wide programs that can deliver measurable impact and build the foundation for tomorrow,” Morris explained. “By embedding this across our business, we will unlock structural cost advantages, accelerate speed to market and create new profit pools. We’re turning technology into a growth engine, improving margins, deepening customer loyalty and positioning us to win.”