Albertsons Wants AI Woven Into Every Part of the Grocery Business
A 10% basket lift drew attention, but executives emphasized durability, productivity and scale
Albertsons says customers who use its AI-powered shopping assistant are putting about 10% more items in their carts. The figure, disclosed on the company’s latest earnings call, is one of the clearest AI-related metrics a major U.S. grocer has shared so far. But executives spent far less time celebrating the number than explaining why it wasn’t the point.
“We’re not using AI as a short-term lever,” CEO Susan Morris said on the Jan. 7 call, telling analysts the company is embedding AI across merchandising, labor and supply chain operations to create what she called a “durable structural advantage.”
Albertsons’ most attention-grabbing AI metric so far, a roughly 10% increase in basket size among customers using its Ask AI shopping assistant, risks obscuring the broader strategy taking shape. The basket lift is real, the company says, but executives positioned it as an early signal within a broader transformation rather than as a standalone KPI.
The company’s third-quarter fiscal 2025 results provided the backdrop for that argument. Identical sales rose 2.4% year over year, digital sales climbed 21%, and loyalty membership reached nearly 50 million. Adjusted EBITDA came in at $1.039 billion.
Against a consumer environment marked by price sensitivity and uneven demand, Albertsons used the earnings call to argue that AI is becoming core infrastructure.
AI as the operating system
Throughout the call, executives described AI as an enterprise-wide layer designed to connect decision-making across the organization, rather than as a tool confined to a single department.
Rather than isolating AI inside e-commerce or analytics teams, Albertsons outlined how it is being embedded into the systems that govern pricing, labor, inventory and customer engagement.
Digital customer experience is the most visible entry point. Ask AI, the company’s conversational shopping assistant, is now accessible across the apps and websites of Albertsons’ banner stores.
Albertsons says the tool helps customers plan meals, discover products and complete shopping tasks using natural language rather than traditional keyword search. Executives tied early usage to larger baskets and repeat engagement, positioning the assistant as a gateway into deeper digital relationships rather than a one-off convenience feature.
Behind the scenes, AI is also being applied to merchandising intelligence. Albertsons said it is equipping merchants with AI-driven insights and automated execution to guide pricing, promotions and assortment decisions.
Management described this as a way to transform category management, freeing employees from manual processes while improving margins through more informed, consistent decision-making.
Labor is another major focus. The company is deploying generative AI to optimize labor forecasting and scheduling across its retail footprint. Executives framed the effort as a productivity initiative that also improves execution and customer service by ensuring the right associates are in the right place at the right time.
AI also plays a central role in supply chain operations. Management said advanced demand forecasting and computer vision are improving forecasting accuracy, fulfillment and on-shelf availability.
In a grocery business where inventory errors can quickly erode margins and customer trust, Albertsons positioned these systems as essential to day-to-day execution.
These initiatives resemble an operating system more than a collection of tools. AI is meant to sit beneath the surface, connecting front-end customer behavior with back-end operational decisions.
Executives reinforced that view by pointing to partnerships with cloud and data providers including Google, OpenAI and Databricks, which they described as foundational to scaling AI across the enterprise.
Why the 10% basket lift isn’t the point
The most concrete metric disclosed during the call: a roughly 10% increase in basket size among customers using Ask AI, has drawn outsized attention.
It is a rare, specific figure in a field often dominated by abstract claims about personalization and efficiency.
But Albertsons leadership was careful not to over-index on that number. The basket lift applies only to customers who use Ask AI, not to the broader customer base, and executives framed it as an early indicator rather than proof of enterprise-wide impact.
Morris repeatedly emphasized that the company’s objective is to drive repeat trips, deepen loyalty and increase lifetime value over time. In that framing, Ask AI is less a short-term revenue lever than a behavioral tool designed to make shopping easier and more personalized so customers return more often.
The long-term economics of AI in retail depend less on isolated feature performance and more on adoption and integration. A tool that delivers strong results for a subset of digital users does not materially change cost structure or margins unless it becomes widely used and tightly linked to operations.
Albertsons appears to be betting that integration will do that work. Executives repeatedly described AI-driven benefits as gradual and compounding, with productivity gains expected to accumulate over time.
As more customers engage digitally, as labor planning becomes more precise, and as inventory forecasting improves, the company expects those gains to fund further investment.
That logic extends to retail media as well. Albertsons highlighted its Media Collective as a high-margin growth engine supported by first-party data from loyalty and digital channels.
While specific revenue figures were not disclosed, management framed retail media as a structural profit pool that can help offset pricing pressure and fund value investments elsewhere in the business.
The strategy is being pursued against a cautious consumer backdrop. Executives acknowledged pressure across income segments, with lower-income shoppers stretched and higher-income shoppers becoming more value-conscious.
Rather than relying on broad price cuts, Albertsons positioned AI as a way to be more targeted: optimizing promotions, labor and inventory with greater precision. Meanwhile, Industry peers are pursuing similar technologies, particularly around conversational commerce and agentic AI.