Albertsons: winning with its acquisitions

Date : 27 August 2015

We take a look at how Albertsons is driving an improved performance at the retailers it has acquired over the last two years.

First quarter sales up 2.2%

Having announced plans last month for an initial public offering (IPO) of its shares, an updated filing with the SEC reveals an improving performance at the business it has acquired over the last two years. In the first quarter of this year, net sales increased by 2.2% to $17.6bn, with identical store sales up 4.3%.

Acquisition playbook delivering improved results at Albertsons and Safeway

Strong growth was driven by the Albertsons stores acquired from Supervalu in 2013, with identical store sales up 9.5%, building on the 8.2% growth over 2014. The Safeway stores, acquired earlier this year, delivered identical store sales of 3.8%, also improving on the performance for 2014, where sales were up 3.0%. With it still being early days in terms of improving the performance at Safeway, Albertsons will be looking to replicate its success with the stores acquired from Supervalu. The focus this year is on improving store standards, delivering superior customer service, providing a compelling product offering, an attractive value proposition and driving innovation across its network of stores.

New in-store marketing campaign

A number of changes are already underway at its stores, including a new ‘It’s just better’ marketing campaign. This is being executed at both Safeway and Albertsons and aims to highlight key points of difference including freshness, convenience and service. Private label integration is also underway, with Safeway’s former Safeway Select premium range now appearing in Albertsons’ stores as Signature Select.

        

 Source: IGD Research

What’s left to do this year?

For the remainder of 2015, the retailer plans on enhancing and upgrading its fresh, natural and organic products, investing in its private label ranges, extending its loyalty programs, and expanding its ecommerce operations. In many of these areas it will be drawing on Safeway’s leadership. With a significant store estate, portfolio improvements will also play an important role, including investing in pharmacy and health wellness initiatives. With the IPO planned, the retailer will be hoping that investors will buy into this strategy and the growth in sales, and profitability which it will be aiming to deliver.

What are the key trends shaping the US market this year, and what are some of the latest market developments? Click here to view our latest North America in focus insight deck.