Albertsons saw big jump in sales from coronavirus pandemic. Here’s the latest
The coronavirus pandemic is fueling strong sales at Albertsons Companies as customers buy more groceries to prepare meals at home.
Sales at the Boise grocery giant’s stores open at least 15 months, excluding fuel, were up 12.3% in the quarter ending Dec. 5, compared with a year earlier, according to a company earnings report Tuesday. Digital sales grew 225%, the third straight quarter of more than 200% sales growth.
Overall, sales for the nation’s second-largest grocer, behind Kroger, rose 9.2% to $15.4 billion. The company reported $124 million in profit.
The company also announced its first dividend since Albertsons began selling stock to the public on June 26. On Feb. 10, it will issue a dividend of 10 cents per share to shareholders of record as of Jan. 26.
“Our constant focus on our customers continued to drive strong growth and market share gains in the third quarter,” CEO Vivek Sankaran said during a call with analysts. “It is clear that our strategy is working, and as we continue to execute on our strategic priorities, we believe we are well positioned to deliver sustainable growth over the long term.”
The pandemic, which engulfed the nation in March, caused families to change their shopping habits. While many brick and mortar stores have struggled to retain business, grocers such as Albertsons, Walmart and Kroger, the parent company of Portland-based Fred Meyer, have thrived.
“Customers continue to consolidate trips, and we continue to see fewer trips per household but larger baskets,” Sankaran said. “And these households are spending more with us compared to last year.”
The company’s most loyal customers visit Albertsons and its other companies, including Safeway, Vons and Jewel-Osco, more than twice a week, he said.
While same-store sales dipped from the 13.8% increase reported in the previous quarter, they beat expectations and surpassed those reported by Kroger and Walmart.
“We’re encouraged that customers spending more time at home are looking to us,” he said.
During the pandemic, sales at meat and fish counters have increased significantly, he said.
“We continue to see average sales that are higher, driven by seafood and shrimp, as well as in meat, driven by items such as beef, bacon and chicken,” Sankaran said.
Sankaran said he’s seen evidence that customers will not revert to pre-Covid-19 food consumption patterns anytime soon. Several large companies, he said, have extended work-from-home policies, and some have committed to having some employees continue to work from home even after the pandemic ends.
“We believe that this will continue to drive more breakfasts and lunches at home,” he said. “We’ve seen large increases in sales of breakfast items such as cereal, eggs and bacon as people are eating a full breakfast at home, rather than grabbing breakfast on the go.”
Sales of cheese for sandwiches and salad kits have also increased.
Drive-up sales, where customers place orders online and then have store workers bring the groceries to their cars, increased by 800%. Albertsons added drive-up service to 231 stores during the quarter. It’s now available at 1,181 of the company’s 2,253 stores, and Albertsons plans to bring the total to more than 1,400 by the end of the fiscal year in late February.
Albertsons plans to hire more than 800 pharmacists and pharmacy technicians to handle the increase in demand when COVID-19 vaccines become available at stores. The company will provide free vaccinations, Sankaran said.
This story was originally published January 12, 2021 at 12:46 PM.
