Frozen and Refrigerated Buyer – Will an upcoming merger with Rite Aid be enough to turn things around at the nation’s second-largest supermarket chain? Industry observers aren’t so sure.
Plain vanilla,” “mediocre at best,” “generic,” “tired,” “middle of the road,” and “meh.” Those are some of the ways a panel of industry observers described Boise, Idaho-based Albertsons. So why the heck did we name it our 2018 Retailer of the Year?! Well, keep in mind that the title doesn’t necessarily go to the best operator. For better or worse, we’re looking for a chain whose actions over the past year have influenced the industry in a significant way, and Albertsons clearly fits the bill.
While Amazon-Whole Foods may have been the obvious choice for Retailer of the Year, the truth is we’ve done that story to death. Yes, e-commerce is the wave of the future, but “traditional” brick-and-mortar isn’t going any- where anytime soon, and after its mega-merger with Rite Aid is completed later this year (more on that coming up), Albertsons will have a whopping 4,900-plus locations nationwide, serving more than 40 million customers per week. It also announced several unique initiatives in the past few months and recently welcomed a new president and COO with a history of transforming under- performing companies, so there’s reason for optimism.
Comments from Perry Kramer – Page 24:
On the flip side, the merger will also allow Rite Aid to increase its presence in the grocery business, says Perry Kramer, senior vp and practice lead at Boston Retail Partners, Boston. “Rite Aid has a very significant urban foot- print, and many of their stores have recently been refreshed or remodeled,” he reports. “Those locations provide a great opportunity to expand frozen and refrigerated offerings, including Albertsons private label brands, which will help extend brand recognition and improve margins in those stores.” Another benefit of the merger with Rite Aid is the addition of a large amount of consumer data to enhance Albertsons’ customer data analytics, says Kramer. “Analyzing the data will enable the company to build a much more extensive view of its customers,” which will help it improve the customer experience both online and in stores.
Comments from Perry Kramer – Page 26:
In addition to using POS and loyalty data to improve customer analytics, Albertsons is likely to utilize real-time transactional data to improve its in-stock positions, which will become even more important as the company grows its digital presence, including online ordering and home delivery, adds Kramer.
One area that could truly become a competitive advantage for Albertsons is its own brands, most of which originated with Safeway, which many pundits list as one of the chain’s greatest assets. “The company has done a good job with its private labels in individual stores,” says Kramer, citing sales of more than $11 billion in fiscal 2017. However, “There’s a significant opportunity to continue to expand store brands across Albertsons’ many banners. When consumers see the same brands in different stores and when they shop and browse online they will become household names.”
Comments from Perry Kramer – Page 28:
But Kramer likes the idea of partnering with an established player in the meal kit space. “It allows Albertsons to rapidly roll out this new capability while learning the meal kit delivery business without a major investment of capital or time. Once it has an understanding of this rapidly changing market, the retailer will have the ability to bring the operation in-house if it makes sense.” He adds, “I think the move demonstrates Albertsons’ recognition that it needs to be ahead of trends if it’s going to continue to grow.”
Read Full Article: RETAILER OF THE YEAR: Albertsons (pages 22-28)