US-based Albertsons delivered a strong first quarter, including digital sales growth of 276%.
Identical store sales up 26.5%
Albertsons’ first quarter sales increased 21.4% to $22.8bn, with identical store sales up 26.5%. The significant increase was driven by the surge in demand related to COVID-19, which also underpinned the acceleration of its digital operations. Net income increased from $49.0m in Q1 2019 to $586.2m. Commenting on the performance, Vivek Sankaran, president and CEO, stated,
"I am inspired by the many ways my colleagues continue to step up to serve our customers and help our communities around the country during this time of need. Their hard work and dedication have also allowed us to successfully navigate this extraordinary environment and we have accelerated our digital and eCommerce strategy to adapt to market conditions. We generated strong financial performance in the first quarter, including robust cash flow and enhanced liquidity, which support our continued investment to benefit our associates, customers, communities and stockholders."
Source: IGD Research
Accelerating ecommerce operations
This strong set of results follows on from the retailer’s recent return as a publicly listed company. It remains in a strong position in the sector as the second largest operator of traditional supermarkets in the US. Central to its success during COVID-19 has been its ecommerce business. During the pandemic it accelerated the roll out of its Drive Up & Go curbside pickup service to over 650 locations. Home delivery has been extended to more than 2,000 locations, optimising its partnerships with Instacart, GrubHub and Uber Eats for on-demand delivery, including for prepared and ready to eat foods.
Investing in private label
While there is a high degree of uncertainty in terms of the consumer outlook, the economic backdrop is set to be challenging. However, through its private label operations, the business remains well-positioned for any flight to value. Albertsons plans to launch 800 new products annually over the next few years, as it aims to grow penetration beyond 25% of sales.
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