Merchant Innovation

Major Grocery Store Chain Heads For IPO

Albertsons — which includes under its umbrella Safeway, Acme and Jewel-Osco — has taken the first step toward becoming a publicly traded company.

The company has announced its plans to raise as much as $100 million for its IPO, The Wall Street Journal reported yesterday (July 8). This move comes after the company acquired Safeway for $9.4 billion, which caused the company to sell other stores to abide to regulatory measures. Still, it’s managed to keep its title as the second-largest grocery store chain, falling only behind Kroger; Albertsons has 2,205 locations.

Albertsons’ move toward an IPO is quite the flip for the company that has come back from some tough profit losses. Specifically, as The Journal points out, the company had a loss of $1.2 billion on $27.2 billion in sales. But sales have grown since then, including at the new stores, where sales jumped 4.6 percent last year.

So what’s next? Albertsons said it plans to open more stores — and has its eyes on more acquisitions. The proceeds from the IPO would be used to help the company dig out of its debt, along with other business matters,  the report said. In its SEC filling, the company noted the challenges of the industry, which include growing competition that has taken their grocery business online.

As for its IPO ambitions, the charge is being led by Goldman Sachs & Co., Bank of America Merrill Lynch, Citigroup, Morgan Stanley and Lazard, The Journal reported.

Major grocery store chains are also facing increased competition from eCommerce giants like Amazon, and the variety of other grocery delivery services, like Peapod, that have changed the way grocery stores have to market their services to the growing population of consumers who are turning online for their grocery needs. Amazon Fresh, for example, has recently expanded its grocery delivery footprint into more markets — and has plans to continue to more cities.


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