Albertsons invests to improve offer for Latino customers

Date : 20 November 2017

Albertsons has made a strategic investment in El Rancho Supermercado, a Texas-based retailer which operates stores focused on Latino customers.

Growing Albertsons’ business in Texas

El Rancho Supermercado operates 16 stores in Texas. Following this investment, which will see El Rancho continue to operate as an independent company, Albertsons will aim to optimise their combined expertise to serve customers across both companies. Texas is a significant business area for Albertsons, having acquired United Supermarkets in 2013, which also saw it deepen its expertise with Latino customers. It also operates stores under the Albertsons and Tom Thumb banners in the state.

Opportunity to improve offer across range of banners

The agreement with El Rancho provides Albertsons an opportunity to invest in the fast-growing Latino grocery sector. While the retailer already operates a variety of store banners in predominantly Latino areas, this will enable it to improve the customer offer. For El Rancho, the deal will enable it to accelerate growth and expand into new markets throughout Texas. The company will also optimise Albertsons’ broader capabilities to improve operational efficiencies.

Cardenas Markets aiming to build leadership position in sector

This sector has seen increased activity this year, with two prominent chains, Cardenas Markets and Mi Pueblo, merging to become one of the largest Hispanic supermarket chains in the US. Both companies have received significant investment from private equity group, KKR, and while they continue to operate separately, they are managed under one executive team led by CEO John Gomez. In addition to opening new stores within existing markets in California and Nevada, the new company, Cardenas Markets LLC, is also exploring options to expand its footprint across other key Hispanic markets.

Albertsons investing in high growth areas

This is the second investment in recent months by Albertsons in a major growth area. In September, it acquired leading online meal kit company, Plated. Albertsons is aiming to transform the experience for its customers in this area by creating an omni-channel meal kit service. This will include being able to purchase the products in-store, ordering online for store pickup or home delivery via Albertsons’ ecommerce service, or having a regular subscription to the service.

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Stewart Samuel, Program Director, IGD Canada: based in Canada, Stewart heads up all of IGD's research and coverage on Albertsons. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region's markets, channels and retailers. Follow Stewart on Twitter: @Stewart_IGD

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