Albertsons plans public listing

Keshia Beadle
Senior Retail Analyst
@RetailAnalysis

Date : 09 March 2020

As Albertsons prepares to go public, we look at some of the key strengths of the business and factors driving its growth. It continues to perform well in a challenging environment, making it an attractive proposition for investors.

Clear strategic framework

Albertsons aims to offer a shopping experience that is easy, exciting and friendly for its customers and supports this through its strategic framework. The four key pillars of its strategy are:

1) Growth: leverage the core business, including its stores, ecommerce business and own brands

2) Productivity: optimise procurement and indirect spend, deliver operational efficiencies

3) Technology: modernise infrastructure, leverage data science

4) Talent & Culture: friendly service at the heart of the business, deep ties to the community

Ecommerce and private label key growth drivers

To meet customers needs for convenience and flexibility, Albertsons has been rolling out its curbside pick up service, Drive Up & Go, which is now available in around 550 locations. Over the next two years, it plans to expand this to 1,400 locations. It has also been expanding its home delivery network, which is now offered through more than 2,000 stores and it has partnered with businesses such as Instacart to increase the options available.

Albertsons continues to grow its own brand portfolio, with penetration now exceeding 25% of sales. Four of its own brand lines now achieve more than $1bn in annual sales (Lucerne, Signature Select, Signature Cafe and O Organics) and it is continually launching new and innovative products to grow the ranges further.

Scale of its coverage

Since merging with Safeway in 2015, Albertsons has successfully integrated the business and utilised the scale of its coverage to grow further. The retailer now has over 2,260 stores across 34 states and is one of the largest food retailers in the US. Under the leadership of Vivek Sankaran, who joined as CEO in April 2019, Albertsons is well placed to continue building on its strong foundations and will continue to drive new store developments, as well as accelerating its ecommerce initiatives as the online grocery market continues to grow. This makes it a good time for its current investors to take the company public.

 

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