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Albertsons CEO says digital and work-from-home will fuel grocery sales even after pandemic

Julia La Roche
·Correspondent
·3 min read

Albertsons Cos. (ACI) CEO Vivek Sankaran says digital advances and more people working from home will continue to fuel sales growth for the grocery operator even after the COVID-19 pandemic ends.

Shares of Albertsons hit an all-time high on Tuesday after the grocer reported stronger-than-expected third-quarter results and boosted full-year guidance. Albertsons, which operates brands such as Acme, Safeway, and Shaw’s, delivered earnings per share of 66 cents, topping analysts’ estimates of 42 cents per share. Revenue surpassed expectations, jumping 9% year-over-year to $15.4 billion, compared to estimates of $15.34 billion.

The grocery operator saw its digital sales, which includes delivery and drive-up, skyrocket 225% in the third quarter, the second consecutive quarter of over 200% sales growth.

“It’s an important part of how the consumer is shopping today. I think she wants a choice, sometimes to go the store, sometimes to have it delivered, sometimes to just pick it up in the trunk of the car,” Sankaran told Yahoo Finance Live.

Albertsons butcher shop employee Patricia Sermeno, right, helps Sergio Gil shop for meat at the Albertsons supermarket in Glendale, Calif., Monday April 28, 2008. The tax rebates starting to show up in Americans' mailboxes and bank accounts will likely be used for food and other basic necessities, making them less of an economic stimulus than the Bush administration hoped for. (AP Photo/Kevork Djansezian)
Albertsons butcher shop employee Patricia Sermeno, right, helps Sergio Gil shop for meat at the Albertsons supermarket in Glendale, Calif., Monday April 28, 2008. The tax rebates starting to show up in Americans' mailboxes and bank accounts will likely be used for food and other basic necessities, making them less of an economic stimulus than the Bush administration hoped for. (AP Photo/Kevork Djansezian)

According to Sankaran, the consumers that embrace omnichannel shopping, blending online with physical retail, spend 20% to 22% more with the company.

“The ones that have shopped with us for a long-time, when they start engaging in this, there’s a segment of our customers that are spending three times as much with us. So, we know that customers care about it, and we are accelerating capacity and capability in that space very, very significantly,” Sankaran added.

The company’s DriveUp & Go curbside pickup added 231 more locations in the quarter and is now featured at 1,181 stores. Albertsons expects to reach 1,800 locations by the end of fiscal 2021. Delivery is now available across 90% of Albertsons’ store footprint.

As someone who watches shopping patterns and data, Sankaran thinks the work-from-home trend will persist, resulting in more meals prepared at home.

“The trend that I think is going to continue to stick, even after the pandemic, is all of us working just a little bit more at home, having that flexibility to work more at home. And when people work more at home, you eat more breakfasts and lunches at home, and that’s going to drive more in-home consumption. So, the broad theme I’ll leave you with is what we’re excited about is this notion of in-home consumption, either cooking at home or eating at home, both of which drive more sales from people like us who carry a wide variety of fresh product,” he said.

On the earnings call with analysts, Sankaran noted that the grocer has seen “large increases” in sales of breakfast items such as eggs, bacon, and cereal. He also noted that lunch items such as sandwich cheese and pre-made salads have increased.


Julia La Roche is a correspondent for Yahoo Finance. Follow her on
Twitter.