When Albertsons reported fourth-quarter and full-year earnings in April, the company gave an update on its Customers for Life transformation strategy, which it launched in 2022. The operator of more than 2,000 stores in the United States embarked on a five-pronged strategy designed to place the customer at the center of everything that it does, with the ultimate goal of supporting customers every day, every week and for a lifetime.
Retail show learns that the multifaceted strategy includes digitally connecting and engaging customers through the mobile app and website so that they can enjoy curated experiences in e-commerce, the community, loyalty, health and media; differentiating the store experience by deepening engagement using technology, and removing associate pain points to allow employees to focus on customer service versus just tasks; elevating the retailer’s distinctiveness in fresh by expanding private-brand products and services, and enhancing product offerings in center store to address customers’ changing needs and preferences; modernizing capabilities through an improved supply chain, enhanced data and data analytics, and ongoing productivity, all built on the foundation of being locally great and nationally strong; and further embedding environmental, social and governance (ESG) throughout operations.
Retail show learns that CEO Vivek Sankaran credited the strategy for the retailer’s strong financial report for its fourth quarter and fiscal 2022. For the fourth quarter, Albertsons’ net sales and other revenue was $18.3 billion, compared with $17.4 billion year over year. The increase was driven by a 5.6% increase in identical sales, spurred on by retail price inflation, growth in pharmacy and increasing digital penetration. Also in Q4, digital sales increased 16%; loyalty members increased 15% to more than 34 million; net income was $311 million, or 54 cents per share; and adjusted EBITDA came to $1,050 million. Gross margin rate decreased year over year to 27.8% from 28.7%, with the pharmacy business and decrease in COVID-19 vaccinations driving approximately half of the rate decrease.
In fiscal 2022, Albertsons saw same-store sales increase 6.9%, digital sales increase 28% and an adjusted EBITDA of $4,677 million. Net income was $1,514 million, or $2.27 per share, and adjusted net income was $1,965 million, or $3.37 per share.
The company reported capital expenditures of $2,153.9 million in fiscal 2022, including investments in digital and technology platforms, 173 store remodels, and the opening of five new stores.
While Sankaran believes that the grocer is well positioned for top-line growth in fiscal 2023, he’s anticipating an uncertain, and possibly challenging, economic backdrop.
In May, Albertsons said it would consolidate three of its Signature private brands under a single master brand, Signature SELECT, which will feature a new logo and packaging design. The transition from Signature Farms, Signature Care and Signature Café is currently underway at Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s and more, and is expected to be complete in early 2024.
Retail show learns that the transition was apparent during a recent visit to an Acme Supermarket in Hopewell Junction, N.Y. New signage with the updated logo design was all over the perimeter and center store, with a particular emphasis in the produce department.
Source: Progressive Grocer