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Albertsons sees massive sales increase, huge ecommerce boom and hires 55,000 people

Tamarack: Thrill, Grill, Chill
Idaho Business pres. by My 102.7

Boise-based Albertsons Companies reported its 4th quarter and full year 2019 results Thursday. And while the numbers remain strong – they only show the picture through the end of February.

But the company also provided information on the first eight weeks of its new year, which started March 1. Those numbers show an almost-unheard of level of growth.

For the first four weeks of March, sales ramped up 47% over the same time last year. In the four weeks from March 29 through April 25th, sales shot up 21% from last year. When you look at the whole period, sales went up 34%.

To put that in perspective, the company said it hoped to grow its sales two percent this year.

“Although the company is unable to predict the continuing impact of COVID-19 on sales, gross profit, and expenses for the balance of the year, it is currently expected that it can achieve or exceed its original plan,” the grocer wrote in a news release.

Ecommerce booms

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It said the pandemic has pushed large increases in online grocery sales. It operates both ‘drive-up’ and home delivery options.

“Total ecommerce sales were up 109% during March. Strong demand has continued during April,” Sankaran said.

Sankaran said the ecommerce number increased to an eye-popping 243% in April. The increase from March to April was due to a change in labor.

“Our biggest bottleneck for ecommerce was labor,” Sankaran said. “Finding pickers and packagers was a challenge and we put a focus there.”

The company said it hired 55,000 new associates since March 1.

Albertsons rolled out a long list of changes and adjustments in March and April, including sneeze guards at checkouts, limiting store capacity, special shopping times for seniors, and a $2/hour pay bump for many employees.

Sankaran said the number of customers using loyalty programs and in-store coupons also saw big increases since the pandemic began impacting the US.

[Q&A with Albertsons: Worker safety, hiring furloughed workers, COVID precautions and more]

Supply chain

Sankaran said that they’ve seen increased stability in the supply chain. They sourced hand sanitizer in large drums to supply stores, and Sankaran has said the “produce supply has come back nicely.”

He said that coming months could be challenging, but he’s confident in the ability of the company to keep its stores stocked.

“There are processors having trouble in meat and so on, and I think we are going to hear that for several months until this disease is under control,” he said. “We just have to be nimble about it. There is no reason for anyone to panic on supply. We are at a state of steadiness and will keep that.”

Increases before pandemic

Looking at the pre-pandemic 4th quarter, Albertsons also booked increases in sales. It grew 1.8% from the fourth quarter of last year. It saw its EBITDA (an acronym for earnings before interest, taxes, depreciation and amortization – essentially a measure of profitability) hit $756 million. The profit came on sales of $15.4 billion, up from $14 billion last year.

For the full year of fiscal 2019, the company took in $62.5 billion in revenue and EBITDA of $2.83 billion. Both numbers saw growth from the prior year.

“We are pleased that our momentum continued as we closed fiscal 2019, with improved performance on the top and bottom line,” Albertsons CEO Vivek Sankaran said. “However, the world has changed since then, and we are heavily focused on supporting our associates, our customers and the communities we serve as we respond to the increased demand resulting from the COVID-19 pandemic.”

Albertsons said it saw growth in its store brands – and a 40% increase in home delivery and store pickup services in 2019.

Still mulling IPO

Just before the pandemic began impacting the US, news broke that Albertsons started to move forward with an initial public offering. In the days after, the overall stock market tanked.

“We will be watching the markets to determine the timing for our initial public offering,” Sankaran said.

A date for the offering still isn’t known.

[In ecommerce battle, Albertsons looks to small neighborhood warehouses; amps up ‘drive up’ service in Boise area]

Grocery industry’s boom

US Census data shows the grocery industry as a whole shot up to 63% of American’s total spending on food. That number had been steadily declining for decades. March saw grocery spending return to levels not seen since 1996, according to Census data analyzed by Quartz.

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