Kroger Acquisition News

CINCINNATI — The Kroger Co. has taken a big step toward the largest acquisition in its history by certifying to the Federal Trade Commission that its $24.6 billion deal with the Albertsons grocery chain substantially complies with antitrust rules.Nov 29, 2023

Own brands drive record Q1 for Albertsons

By Dan Ochwat - 07/27/2020

Albertsons’ O Organics and Open Nature store brands grew faster than its overall business in the first quarter, according to the retailer’s earnings call on July 27. The retailer also said it has more in store for its own brands, noting a goal to reach 30% market penetration for own brands in the years ahead.

Albertsons’ first quarter as a public company proved to be “a record quarter by all measures,” per Vivek Sankaran, president and CEO, during the Q1 earnings call presentation.

A whopping 276% increase in digital sales in the 16 weeks ended June 20 certainly stood out, as Sankaran called it a “supercharged” digital focus, to go along with same-store sales up 26.5%, a major driver of its overall sales and other revenue reaching $22.8 billion, up 21.4% compared to the 16 weeks ended June 15, 2019.

This portfolio includes nine brands, over 12,000 products and was a $13 billion business in 2019.

Vivek Sankaran , Albertsons CEO

However, special notice was made on Albertsons’ own brands during the call. 

“We are constantly focused on innovation and continuing to grow our own brands portfolio, which is another advantage for us,” Sankaran said. “This portfolio includes nine brands, over 12,000 products and was a $13 billion business in 2019, growing faster than our branded business and on average contributes a 1,000-basis point advantage in gross margin versus national brands.”

He said own brands have been growing steadily as a part of its overall sales growth in recent years and the plan is to extend own brand penetration from 25.4% in 2019 to 30% in the next few years. 

In Q1, Albertsons introduced more than 400 new items in own brands, and Sankaran called out the latest ice cream flavors that include big, innovative flavors, but also a range of non-dairy, plant-based flavors. Sankaran said the company sees more growth in plant-based products and will continue to grow in the category.

Two own brands that fit that bill are O Organics and Open Nature, who Sankaran said grew faster than Albertsons overall business in the quarter in sales, seeing a 31% and 28% increase, respectively.

The own brands in the meat category also helped drive sales in fresh offerings, seeing record sales in hot dogs and pork ribs in the quarter.

Also of note, Albertsons saw an increase in its loyalty rewards program, expanding loyal members by 27% in the first quarter to 22.5 million members. It’s a key part of the omnichannel experience for Albertsons, Sankaran said. Loyalty members spend three times more than non-members.

The retailer remodeled 46 stores in the quarter, continuing to focus on its stores.

Albertsons has another big sales month

April same-store sales were up 21% for Albertsons  —  a huge increase, but one that remains overshadowed by its 47% sales skyrocket in March.

The Boise, Idaho-based retailer reported the numbers on April 30 as part of its fourth-quarter and full-year sales release. Strong penetration by the company’s store brands was mentioned as a reason for Albertsons' overall strong showing in its fiscal 2019 results, which included revenue $62.5 billion during the 53 weeks ended Feb 29, as well as gross profit margin up 28% versus fiscal 2018. The year also registered a 2.1% uptick in identical sales growth for the year. For its fourth quarter, Albertsons reported $15.4 billion in sales, up from the $14 billion it brought in a year ago, which mostly was attributed to an extra week in fiscal 2019's Q4. Gross profit for the quarter dipped less than a percentage point from the prior-year period to 28.6%.

Other highlights from the report were big results in digital sales growth, seeing a 32% increase in the fourth quarter and a 39% jump year over year.

"We are pleased that our momentum continued as we closed fiscal 2019, with improved performance on the top and bottom line,” said Vivek Sankaran, president and CEO. “However, the world has changed since then, and we are heavily focused on supporting our associates, our customers and the communities we serve as we respond to the increased demand resulting from the COVID-19 pandemic.”

Sankaran continued to say the organization is “proud of the efforts of our store, distribution and manufacturing teams, whose work has been heroic in the face of this crisis, and we thank them for everything they continue to do. Both our stores and our online business are seeing significantly increased demand as consumers shift to more food-at-home."

Some final highlights from the report, Albertsons said its “Just for U” personalized loyalty program saw a 26% increase in registrations and a 37% increase in coupon redemptions.

Souce: Dan Ochwat - 05/01/2020

Identical store sales were up 47% in March

BOISE, Idaho — Albertsons Cos. posted an identical store sales increase of 47% for the first four weeks of fiscal 2020, the company said on Thursday. Quarter-to-date identical sales for the first eight weeks of fiscal 2020 increased 34% compared to the comparable prior year period.

Albertsons reported its first quarter sales-to-date as part of an announcement of its fiscal 2019 fourth quarter and full year results. For fiscal 2019 the company reported identical sales growth of 2.1%, digital sales growth of 39%, net income of $466 million and adjusted EBITDA of $2.83 billion.

“We are pleased that our momentum continued as we closed fiscal 2019, with improved performance on the top and bottom line,” Albertsons president and

CEO Vivek Sankaran said in a statement. “However, the world has changed since then, and we are heavily focused on supporting our associates, our customers and the communities we serve as we respond to the increased demand resulting from the COVID-19 pandemic.

“We are so proud of the efforts of our store, distribution and manufacturing teams, whose work has been heroic in the face of this crisis, and we thank them for everything they continue to do. Both our stores and our online business are seeing significantly increased demand as consumers shift to more food-at-home.”

Sales and other revenue totaled $15.4 billion for the 13 weeks ended February 29. That’s a 10.1% increase compared to the 12-week prior year period, and the company said the sales increase was mainly due to the extra week in this year’s quarter, which accounted for about $1.1 billion of the gain. Albertsons also posted a 1.8% increase in identical sales for the quarter, which was partially offset by a reduction in sales related to store closures. That 1.8% increase in identical sales was negatively impacted by the timing of 2019’s Thanksgiving holiday, which cut about 30 basis points from the increase.

Gross profit margin decreased to 28.6% during the fourth quarter of fiscal 2019 compared to 29.0% during the fourth quarter of fiscal 2018. Excluding the impact of fuel, gross profit margin decreased 20 basis points. The decrease was mainly due to incremental rent expense related to the company’s previously completed sale leaseback transactions of certain distribution centers, selective investments in price and promotions and a less favorable LIFO adjustment compared to the fourth quarter of fiscal 2018.

Selling and administrative expenses decreased to 26.5% of sales during the fourth quarter of fiscal 2019, down from 26.9% of sales in the prior year period. That decline was mainly due to lower depreciation and amortization expense, lower acquisition and integration-related costs, and lower employee-related costs as a percentage of sales, partially offset by investments in strategic digital and technology initiatives and higher rent expense related to previously completed sale leaseback transactions.

Net income was $67.8 million during the fourth quarter of fiscal 2019 compared to net income of $135.6 million during the fourth quarter of fiscal 2018.

Prior to the COVID-19 pandemic, the company’s plan for fiscal 2020 called for identical sales of 2.0%, adjusted EBITDA of $2.875 billion, operating income of $1.3 billion and capital expenditures of $1.5 billion. While it is of course unable to predict the course of the COVID-19 pandemic or what effect that will have on its results, Albertsons said that its sales performance so far in the first quarter of fiscal 2020 suggests it could meet or exceed those goals.

Albertsons finished fiscal 2019 with 2,252 retail stores (1,726 of them with pharmacies), 402 associated fuel centers, 23 dedicated distribution centers and 20 manufacturing facilities.

Source:  MMR Mass Market Retailers

Albertsons and UFCW Launch Joint Effort To Classify Grocery Workers as First Responders During Coronavirus Outbreak

WASHINGTON, D.C. – Today, Albertsons Companies stores — including Safeway, ACME Markets, Jewel Osco, Vons, Pavilions, and Albertsons supermarkets — joined the United Food and Commercial Workers International Union (UFCW), America’s largest food and retail union, in announcing a joint national effort to seek a temporary designation of “extended first responders” or “emergency personnel” for supermarket associates to ensure that they are prioritized for testing and provided personal protection equipment during the coronavirus outbreak.

The UFCW is announcing the joint effort to address workplace and public safety in an open letter to our nation’s policymakers and influencers in a full-page advertisement in today’s New York Times print edition of the newspaper.

Albertsons Companies President & CEO Vivek Sankaran and UFCW International President Marc Perrone released the following statement:

“Since the onset of this pandemic, associates in Albertsons Companies stores, who are also proud members of UFCW union, have been working tirelessly to make sure that America’s families have the food and groceries they need. These men and women are sacrificing every day to protect our nation’s food supply, and now is the time for our leaders in state and federal governments to do the same for them. 

“The temporary designation of first responder or emergency personnel status would help ensure these incredible grocery workers access to priority testing, have access to personal protection equipment, like masks and gloves, as well other workplace protections necessary to keep themselves and the customers they serve safe and healthy.

“This joint action is an example of how all Americans must work together to protect everyone working on the frontlines. This includes not only our brave first responders and healthcare workers but also associates at our nation’s grocery stores who are providing communities with the essential food and supplies needed to weather this public health crisis.”

A copy of the New York Times advertisment announcing the joint effort can be seen here.

Background:

Several states have taken measures to ensure grocery store workers have access to similar benefits and protections as first responders:  

• Grocery store workers have access to emergency childcare in the following states: Colorado, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, and New York. 
• Governors in Massachusetts and Pennsylvania have issued executive orders to ensure grocery stores are safer workplaces. 

The UFCW is the largest private sector union in the United States, representing 1.3 million professionals and their families in healthcare, grocery stores, meatpacking, food processing, retail shops and other industries. Our members serve our communities in all 50 states, Canada and Puerto Rico. Learn more about the UFCW at www.ufcw.org.

Source: Albertsons.com