Albertsons’ Sales Tick Up as Shoppers ‘Tighten Their Pocket Books’

Grocery giant Albertsons says inflationary pressures continue to push its shoppers to seek value.

The company on Tuesday (April 15) released earnings showing 24% upticks in digital sales for the quarter and full fiscal year.

Identical sales were up 2.3% for the quarter — 2% for the year — while the company’s loyalty program membership climbed 15% to 45.6 million.

Management noted on an earnings call that its consumers continue to look for value in a tough economic environment.

“Everything you’re hearing about, our own research validates. The consumer sentiment is low, etc.,” said Sharon McCollam, the company’s chief financial officer.

“But the consumer is also saying that they will do what they’ve been doing, which is seek value and find ways to tighten their pocket books, you know, food away from home versus food at home is always a decision for those customers who need value. So at this point, we have not seen a major change.”

One of the quarter’s main sales drivers was Albertsons’ pharmacy offering, where quarterly revenues were up 18% year over year.

“Although the pharmacy business is financially dilutive, cross shoppers between grocery and pharmacy are exceptionally valuable, contributing outsized customer lifetime value to the total store,” said Susan Morris, the company’s incoming CEO.

“For this reason, in fiscal ’25, we will continue to invest in our pharmacy and health platform to drive increased customer engagement and loyalty. We also expect growth in scripts and immunizations as pharmacy competitors continue to close stores.”

She also noted the evolution of the pharmacy customer, who will typically engage with the company in-store first for their first year before engaging across multiple platforms.

“As they engage with us, through those multiple platforms, that’s when we start to see, the bigger unlock and their lifetime value,” she said.

Morris is scheduled to become CEO May 1, the same day that current chief executive Vivek Sankaran is set to retire. She has been Albertson’s chief operating officer since 2018.

On the question of tariffs, management pointed out that the company procures 90% of its products domestically, putting it in a different position than some of its competitors. But even with those domestic purchases, there are ingredients sourced from places that are impacted by the tariffs, a situation the company says warrants further monitoring.