Albertsons CEO says treating people right is the key to success
Albertsons slipped back into the red in its latest quarter as sales edged up only slightly. But its overall financial trend line remains positive.
The Boise grocer on Monday reported a net loss of $17.7 million for the quarter that ended June 16. That compares with a $204.9 million loss the same quarter a year earlier.
Sales and other revenue increased $193.4 million — 1 percent — to $18.7 billion for the 16 weeks ending June 16. But same-store sales, a measure that compares sales only at stores open a year or longer, rose just 0.2 percent. Increased fuel sales of $154.1 million accounted for most of the increase. Gasoline is available at 397 of the chain’s 2,300 stores.
The chain remains burdened by debt its owners took on to reunite the remaining stores of the old Albertsons Inc. chain in 2013 and to buy the bigger Safeway chain in 2015. Without that debt, Albertsons would be profitable.
Jim Donald, the company’s president and chief operating officer, said Albertsons is looking to improve efficiency at its distribution centers and lower costs over time.
“We’ve seen improvements in our pricing, the perception of quality of our meat and produce and the speed of checkout,” Donald said during a conference call with investment analysts.
Albertsons is privately held by a consortium of investment firms led by New York’s Cerberus Capital Management. But it has begun to report its earnings publicly, as publicly traded companies do, because it is preparing to go public later this year when it buys the remaining portion of the Rite Aid drug-store chain, much of which was purchased by Walgreens last year.
The Rite Aid purchase still awaits approval by Rite Aid’s stockholders and federal regulators.
The stockholders are scheduled to meet Aug. 9. Some stockholders have urged a rejection of the sale, saying the deal price is too low.
The earnings call came four days before Albertsons opens its first store in Idaho geared toward food connoisseurs. The store at 1219 Broadway Avenue will emphasize a wide selection of fresh meats and produce, along with meals prepared in-store. It will also have beer on tap, a grill and an ice cream bar.