How Albertsons is driving growth at Safeway

Date : 16 May 2016

As Albertsons reports its fourth quarter sales, we take a look at how it’s been driving growth at Safeway during its first year of ownership.

Identical store sales growth accelerated through 2015

Albertsons acquired Safeway in January last year, more than doubling the scale of the business. While Safeway had been delivering solid results prior to its acquisition, under Albertsons’ ownership, sales growth has accelerated. Having delivered identical store sales growth of 3.0% in 2014, this accelerated each quarter last year to a highpoint of 5.8% in the fourth quarter. The Albertsons business as a whole delivered identical sales growth of 4.7% over the same period.

Activating the Albertsons playbook

Underpinning the significantly improved performance at Safeway has been the activation of the Albertsons playbook. This is based on its extensive experience in integrating retail businesses into its operations. This has included a focus on providing high store standards, delivering superior customer service, providing a compelling product offering, an attractive value proposition and driving innovation across the network of stores. Albertsons had previously proven the success of this approach with the almost 900 stores which it acquired from Supervalu in 2013.

Also drawing on Safeway’s capabilities to improve the broader group

These initiatives were geared towards driving an improvement in identical store sales growth. Over the last 12 months, the retailer has enhanced and upgraded its fresh, natural and organic ranges, launched a new range of non-banner specific private label ranges and invested in pharmacy and health and wellness initiatives. Albertsons has also been drawing on Safeway’s leadership in areas such as loyalty and ecommerce to drive improvements across the broader store estate.

Leveraging Safeway’s brand equity

Earlier this year plans were announced to convert three Albertsons stores to the Safeway banner in Florida, marking the banner’s debut in the state. This demonstrates the strong potential which the leadership at Albertsons sees in the Safeway brand. This could enable Albertsons to develop a more differentiated shopping experience in the region, with a view to potentially broaden the use of the Safeway brand.

Stewart Samuel, Program Director, IGD Canada
Based in Canada, Stewart heads up all of IGD's research and coverage on the US market. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region.