Albertsons, a leading supermarket operator, reported a 1.2% year-over-year increase in net sales and other revenue during the third quarter of fiscal 2024, reaching $18.8 billion. This growth was driven by a 2% increase in identical sales, with a significant contribution from strong growth in pharmacy sales. Additionally, digital sales rose by 23% year-over-year during this period.
CEO Vivek Sankaran highlighted the company’s progress in standing up to competitors but emphasized the need to accelerate growth rates to compete with the best in the industry. Sankaran acknowledged the pressure from major retailers like Walmart and Costco, emphasizing the importance of enhancing productivity and adding value to attract and retain customers.
Despite the failed merger with Kroger, Albertsons has continued to invest in its store fleet and capital expenditures. The company is focused on improving its real estate portfolio and considering potential store closures and openings in specific markets. Sankaran mentioned that Albertsons is not currently in discussions with potential bidders for any of its stores.
The company experienced a slowdown in the food and beverage industry in December, attributed to the short period between holidays in 2024 and consumer cautiousness. Digital sales now account for over 7% of grocery revenue, driven by enhancements to the mobile app and improvements in pickup and delivery operations. Albertsons is seeing stronger growth in first-party digital sales compared to third-party providers.
Albertsons is on track to implement a warehouse management system companywide by the end of 2025, with a projected 30% automation in distribution volume. The Albertsons Media Collective, the retailer’s in-house digital media unit, is exceeding industry standards and driving reinvestment into the business. Technology initiatives, such as personalized coupons based on shopper location and loyalty point redemption for savings, have led to improved customer engagement and spending.
In conclusion, Albertsons’ third-quarter performance reflects its commitment to growth and innovation in a competitive industry landscape. By focusing on productivity, value addition, and digital enhancements, the company aims to remain competitive and enhance customer satisfaction. With strategic investments and operational improvements, Albertsons is positioning itself for continued success in the evolving grocery retail market.