Albertsons’ Loyalty Refresh Contributes to 23% Digital Growth

As grocery shoppers increasingly seek out Click-and-Mortar technologies for a seamless omnichannel experience, Albertsons is seeing double-digit online growth, helped by its rewards refresh.

The grocery giant, which has more than 2,200 stores across the U.S., shared in its first-quarter fiscal 2024 financial results, reported Tuesday (July 23), that it saw digital sales rise 23% year over year as loyalty membership grew by 15% to 41.4 million.

“Our Customers for Life strategy is placing the customer at the center of everything we do, and we continued to drive strong year-over-year growth in loyalty members as we launched our new simplified ‘for U’ loyalty program,” CEO Vivek Sankaran said in a statement. “Amidst an evolving economic and industry backdrop, we continued to deliver outsized growth in our digital and pharmacy businesses.”

The loyalty program growth follows the company’s move, during the quarter, to rethink its rewards strategy. In early April, the retailer announced a simplified program relying on a straightforward, points-based system where users can opt into automatic cash off redemption. Over the quarter, the company gained about 1.6 million loyalty members from the previous quarter‘s 39.8 million.

Amid the grocer’s planned merger with Kroger, the latter is touting Albertsons’ omnichannel strength as a factor that will be a key competitive advantage for the combined company.

The move comes as grocery shoppers seek technologies that will enable convenient shopping across digital and physical channels. PYMNTS Intelligence research finds that the majority of consumers engage with grocers across digital and physical channels, though only 6% do so exclusively via digital channels.

Notably, these trends may vary somewhat going into the summer months, as consumers seasonally adjust their shopping preferences, as Melissa Myres, director of insights at The Kroger Co.’s retail data science, insights and media subsidiary 84.51°, told PYMNTS in an interview. She noted that consumers tend to go to stores more during the summer.

“That could be for a variety of reasons,” Myres said. “It’s lighter longer. They might have a schedule where it’s easier for them to find time. They don’t maybe have to worry about weird weather conditions … We’ve got more foot traffic heading to the brick-and-mortar side of the [grocery] world.”

Overall, grocery shoppers want to be rewarded for their purchases, whatever channels they may shop. The study “2024 Global Digital Shopping Index: U.S. Edition,” a PYMNTS Intelligence collaboration with Visa Acceptance Solutions, found that 54% of grocery shoppers expect rewards or loyalty programs. It also found that three in 10 retail shoppers are Click-and-Mortar customers, preferring to engage with both digital technologies and physical stores during their purchasing journey.

These loyalty investments pay off — consumers have greater affinity for retailers (as opposed to third-party marketplaces or individual brands) in grocery than in any other retail category. The PYMNTS Intelligence report “How Preferred Payment Availability Can Reduce Cart Abandonment” found that 44% of consumers prefer retailers’ websites or apps when shopping for groceries online, while only 29% prefer online marketplaces and 24% prefer brands’ sites or apps.