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Here's Why Albertsons' (ACI) is Staying Ahead of the Curve

·4 min read

Albertsons Companies, Inc. ACI has exhibited a decent run on the bourses in the past year. Thanks to its operational initiatives — strengthening omni-channel solutions, expanding customer reach and focusing on private-label offerings — the stock has outpaced the industry over time. In the said period, shares of this presently Zacks Rank #3 (Hold) player have risen about 36.9% against the industry’s decline of 30.7%.

Let’s Delve Deeper

Albertsons Companies’ focus on providing efficient in-store services, enhancing digital and omni-channel capabilities, and increasing productivity has been contributing to its upbeat performance.

The company has been directing resources toward expanding digital and omni-channel capabilities to better engage with members and provide them a convenient way to shop, whether in-store, curbside or at home. To this end, the company’s unified mobile application, digital wallet, AI chat capability, and expanded self-checkout installations enhance the customer shopping experience. Albertsons Companies’ fourth-quarter digital sales rose 5% year on year and 287% on a two-year stacked basis. The company expanded its Drive Up & Go curbside pickup service to more than 2,000 locations.

In addition to its home delivery network, the company has partnered with third-party delivery services to provide customers with the platform of their choice. It has collaborations with Instacart for rush delivery and DoorDash for the delivery of prepared and ready-to-eat offerings. The company has teamed up with Uber, whereby customers can order a full assortment of groceries on the Uber platform. Recently, Albertsons Companies expanded its partnership with Uber to include more than 2,000 banner stores nationwide. This expansion brings nearly 800 new locations to Uber Eats, including consumers in Connecticut, Indiana, New Hampshire, Utah, Vermont, and Rhode Island for the very first time.

 

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Zacks Investment Research


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Albertsons Companies has rolled out Meal Planning and Schedule & Save digital tools. The Meal Planning digital tool offers a convenient and personalized way to plan meals and cook recipes developed by professional chefs and dietitians. The Schedule & Save feature enables auto-replenishment of grocery and household essentials that are frequently purchased at a discount. Albertsons Companies has partnered with Afresh Technologies, whereby it utilizes the latter’s AI-powered solutions to enhance the fresh offering and enable store associates to better predict demand and monitor inventory position, thereby reducing food waste.

Wrapping Up

Albertsons Companies looks to strengthen its delivery capabilities and payment solutions to make shopping more seamless. With online grocery shopping here to stay even after the pandemic subsides, this food and drug retailer has been making tactical changes in its business operations to adapt and stay relevant in the ever-evolving retail landscape.

Efforts to bolster assortments, especially in the fresh and Own Brands categories, continue to elevate the customer experience. The company’s right assortment in each local market, loyalty program, and ease of checkout through frictionless and contactless payments have been aiding in attracting customers. Through its “just for U” loyalty program, the company has been acquiring new customers and retaining old members and incentivizing them to spend more and buy more often.

3 Hot Stocks to Consider

We have highlighted three better-ranked stocks, namely Dollar Tree DLTR, Sysco Corporation SYY and Kroger KR.

Dollar Tree, which operates discount variety retail stores, sports a Zacks Rank #1 (Strong Buy) at present. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Dollar Tree’s current financial-year sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the year-ago reported numbers. DLTR has an expected EPS growth rate of 15.5% for three-five years.

Sysco Corporation, which is engaged in the marketing and distribution of various food and related products, sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 9.1%, on average.

The Zacks Consensus Estimate for Sysco Corporation’s current financial year sales and EPS suggests growth of 32.5% and 124.3%, respectively, from the year-ago period. SYY has an expected EPS growth rate of 11% for three-five years.

Kroger, the renowned grocery retailer, carries a Zacks Rank of 2 (Buy) at present. KR has an expected EPS growth rate of 11.3% for three-five years.

The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 6.7% and 6.3%, respectively, from the year-ago reported number. KR has a trailing four-quarter earnings surprise of 20.3%, on average.


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