Larry Johnson, Albertson’s CEO, says that the changes are overdue, particularly in light of difficulties experienced in integrating American Stores into the Albertson’s system. American Stores was purchased in June 1999 at a cost of $12.5 billion. Roughly 25% of the store closings will be stand-alone drug stores operating under the names Osco Drug and Sav-on.
Although exact locations of closed stores has not been announced, some analysts say that Albertson’s should consider stepping out of markets in Colorado, Florida, and Texas where the chain does not hold first or second sales position. Total sales for fiscal year 2001 were $36.8 billion. Following the announcement, Albertson’s stock price rose $2.73, an increase of 9.5%, recovering a loss of 8.9% experienced in the past year.