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Albertsons sees big revenue drop due to pandemic comparison, but says it’s way up from 2019

Boise-based Albertsons Companies saw a big decline in revenue for the most recent quarter from the prior year — but the company notes it is comparing 2021 apples to 2020 pandemic oranges.

Sales for stores open at least a year dropped off 10% for the company’s first-quarter, which ran from April through June.

But, using a custom metric – “two-year stacked,” which compares the 2021 numbers to the pre-pandemic year of 2019 – the company notes it saw sales growth 16.5%. Comparisons between this year and last paint a negative picture for the grocery giant, mostly due to the historic pop in grocery sales during the first months of the pandemic.

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Grocery trends changing

Albertsons Boise
Albertsons HQ in Boise. Photo: Don Day/BoiseDev

Company CEO Vivek Sankaran said that the change in the business coming out of the pandemic is producing a number of new trends.

“It’s clear to us that (customers) are eating a lot more at home,” he said during a conference call with investors. “Our fresh sales are a lot higher than the rest of the store – so that trend continues.  I think people are working from home more, and people are more comfortable eating from home.”

In total, Albertsons sold $21.3 billion worth of groceries and other products for the first quarter – down from $22.8 billion in 2020. Though grocery sales dipped, Albertsons said the decrease would have been larger, but fuel sales increased from 2020 as drivers started to hop back in their cars for more trips with most stay-at-home orders around the country ended.

Overall, Albertsons says it booked a profit of $444.8 million. Again, that’s down from a $586.2 million profit in the same period a year ago.

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Digital continues to grow

Albertsons Safeway robot cart
Albertsons will roll out a new cart from Tortoise. Via Albertsons Companies

When using the 2021 to 2019 comparison metric, Albertsons says it saw a 276% increase in its digital sales – though it doesn’t break out how much money it takes in from digital efforts. It also said digital sales were flat from 2020 to 2021.

“E-commerce continues to be strong,” Sankaran said. “If I was to dissect that a bit, our e-commerce transactions are higher than last year – but our transactions are smaller – which you would expect because people aren’t stocking up as much. But what we’ve seen is people are going back to the stores. Our traffic to the stores has gone up significantly.  And it went up week over week over week through the last quarter.”

Sankaran said the company would continue to invest both in its physical stores, as well as growing digital sales.

Albertsons put technology at the center of much of its strategy in recent years. As BoiseDev noted, the company is trialing robot grocery carts, launched a new payment system, launched a robot grocery kiosk, added nationwide pharmacy delivery, and even considered an Amazon Prime-like membership offering and a broad-reaching partnership with Google.

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Looking ahead to the rest of the year, Albertsons issued new guidance. It says when the full fiscal year is done, it expects to see an increase of five to six percent in overall revenue — even with the tough comparisons to the 2020 pandemic numbers. When it goes to its two-year stacked metric, it thinks it will see sales pop 10.9 to 11.9% over 2019 levels.

Albertsons launched in Boise in 1939. It owns twenty store brands around the country – most prominently Safeway, as well as Jewel-Osco, Carrs and United Supermarkets. It operates 2,278 stores as of the end of June – plus 1,725 pharmacies and 339 fuel centers. It is one of Idaho’s largest employers.

Albertsons Companies graphic.
Don Day - BoiseDev editor
Don is the founder and publisher of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow. Contact him at [email protected].

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