Albertsons marks ‘transformational year’ in fiscal 2020

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retailfanmitchell019
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Albertsons marks ‘transformational year’ in fiscal 2020

Post by retailfanmitchell019 »

https://www.supermarketnews.com/retail- ... iscal-2020
My opinion on ACI fiscal 2020:

Pros:
3.1M COVID vaccinations administered
Drive Up & Go growth
Expansion of United Ready Meals program to other divisions
Strong expansion into tech (partnering with Google, Tortoise automated delivery carts in NorCal Safeway)
Aggressive remodel program
Nice new store builds

Cons:
Elimination of Albertsons banner in Washington
Confused store brands
Mediocre pricing (however they are improving)

Suggestions for ACI:
Roll out the Boise Market Street concept to other areas to better compete with Kroger Marketplaces and emerging regionals (in DFW, they should build Market Street stores over 100,000 sqft to prepare for the HEB invasion. These would be ran by United).
Eliminate the Safeway-style pricing structure (which led to their sale) and use LLC-derived pricing.
Use the United pricing structure in DFW to build back share against Kroger and Walmart.
Eliminate the club cards and Just for U crap.
Rename the Signature brands to Albertsons, as it wouldn't make much of a difference at this point. However, this would not work in the Bay Area, where the Albertsons name is hated. Using the Safeway name would be worse, as Safeway is hated in Chicago and Philadelphia.

If ACI were to use my suggestions, they would be much more primed for success, and maybe on track to overtake Kroger in market share (Walmart will always be number one).
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by pseudo3d »

retailfanmitchell019 wrote: May 3rd, 2021, 12:27 pm https://www.supermarketnews.com/retail- ... iscal-2020
My opinion on ACI fiscal 2020:

Pros:
3.1M COVID vaccinations administered
Drive Up & Go growth
Expansion of United Ready Meals program to other divisions
Strong expansion into tech (partnering with Google, Tortoise automated delivery carts in NorCal Safeway)
Aggressive remodel program
Nice new store builds

Cons:
Elimination of Albertsons banner in Washington
Confused store brands
Mediocre pricing (however they are improving)

Suggestions for ACI:
Roll out the Boise Market Street concept to other areas to better compete with Kroger Marketplaces and emerging regionals (in DFW, they should build Market Street stores over 100,000 sqft to prepare for the HEB invasion. These would be ran by United).
Eliminate the Safeway-style pricing structure (which led to their sale) and use LLC-derived pricing.
Use the United pricing structure in DFW to build back share against Kroger and Walmart.
Eliminate the club cards and Just for U crap.
Rename the Signature brands to Albertsons, as it wouldn't make much of a difference at this point. However, this would not work in the Bay Area, where the Albertsons name is hated. Using the Safeway name would be worse, as Safeway is hated in Chicago and Philadelphia.

If ACI were to use my suggestions, they would be much more primed for success, and maybe on track to overtake Kroger in market share (Walmart will always be number one).
I would not try to dilute the Albertsons Market Street concept in other divisions, rather implement some of the features into the other stores (like the "Dish" gift department is found in real Market Street stores and the Boise store, that probably doesn't need to be in every store). Similarly, Market Street doesn't really need to expand in DFW if Albertsons/Tom Thumb gets with the program and builds larger stores/cheaper items/no card to better compete.
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by Bagels »

I strongly disagree that Albertsons has improved on price in the last year - in fact, I'd argue the opposite (at least in CA). Their every day prices were high, but their sale prices were among the best in town, and their loss leaders were simply unbeatable. Circa November, there was clearly a shift. For example, for the past several years, Albertsons had the best sale prices on various beverages -- water, soda, juice, coffee, alcohol, etc. This practice ended shortly before Thanksgiving. Albertsons holiday ads were an absolute dud -- perhaps the worst I've ever seen. Somebody spending $100 for a small family meal at Ralphs would've paid $150 or more for the same stuff at Albertsons (and remember, they guaranteed to match the lowest price on turkey... provided you spent $25+ that order).

Albertsons sale pricing is just lousy, with most items priced above that of Ralphs and especially Target. Ralphs recently hiked the price of a three-pack of romaine hearts to $3.99, so I stopped to grab a pack at Albertsons last night -- which had them priced at $4.49 (they're $1.99 at Target; Target has such a limited selection of groceries that I rarely stop there, but that will change). And while checking out, I noticed that the slices of sheet cake by the register were now $3.99 (up from $3.50; Ralphs sells a comparable slice for $1.49). Their app was gimmicky, but they offered some good coupons (e.g. $2 off $7 produce, etc.). Now it seems like their marketing budget was dumped in the weekly weekend freebie -- they've had several high-dollar freebies, including a package of bacon last week, but the couponers - who otherwise do not shop at Albertsons - readily snap these items up. Heck, even the low-volume store by me didn't have a single package of marshmallows (the last freebie) left by early Saturday afternoon.

That said, Albertsons appears to be aggressively going after online grocery orders. Interestingly, they offer different, better pricing for groceries when purchased online - and they perpetually have high-value coupons. So, if you're into grocery delivery (no thanks), you can get some great deals.
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by retailfanmitchell019 »

Bagels wrote: May 4th, 2021, 12:45 pm That said, Albertsons appears to be aggressively going after online grocery orders. Interestingly, they offer different, better pricing for groceries when purchased online - and they perpetually have high-value coupons. So, if you're into grocery delivery (no thanks), you can get some great deals.
People are rapidly moving towards grocery delivery/pick-up, fueled by COVID-19.
With that in mind, Albertsons should apply their online prices in the brick-and-mortar stores. Online, their pricing is in line with competition.
pseudo3d wrote: May 3rd, 2021, 10:17 pm I would not try to dilute the Albertsons Market Street concept in other divisions, rather implement some of the features into the other stores (like the "Dish" gift department is found in real Market Street stores and the Boise store, that probably doesn't need to be in every store). Similarly, Market Street doesn't really need to expand in DFW if Albertsons/Tom Thumb gets with the program and builds larger stores/cheaper items/no card to better compete.
Pseudo3D, what size would you have in mind for larger Albertsons stores, 80-90K sqft? That is the size of newer HEB and Hy-Vee stores.
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by pseudo3d »

retailfanmitchell019 wrote: May 4th, 2021, 2:47 pm
Bagels wrote: May 4th, 2021, 12:45 pm That said, Albertsons appears to be aggressively going after online grocery orders. Interestingly, they offer different, better pricing for groceries when purchased online - and they perpetually have high-value coupons. So, if you're into grocery delivery (no thanks), you can get some great deals.
People are rapidly moving towards grocery delivery/pick-up, fueled by COVID-19.
With that in mind, Albertsons should apply their online prices in the brick-and-mortar stores. Online, their pricing is in line with competition.
pseudo3d wrote: May 3rd, 2021, 10:17 pm I would not try to dilute the Albertsons Market Street concept in other divisions, rather implement some of the features into the other stores (like the "Dish" gift department is found in real Market Street stores and the Boise store, that probably doesn't need to be in every store). Similarly, Market Street doesn't really need to expand in DFW if Albertsons/Tom Thumb gets with the program and builds larger stores/cheaper items/no card to better compete.
Pseudo3D, what size would you have in mind for larger Albertsons stores, 80-90K sqft? That is the size of newer HEB and Hy-Vee stores.
H-E-B does build 100,000 square feet stores (non-Plus), with many newbuilds reaching 90k square feet. Bumping up some Albertsons stores to 80k-90k square feet would work better against H-E-B, and reintroducing garden centers, which some H-E-B stores have now, an outdoor department (though not directly connected to the store, it seems) that features seasonal plants, as well as a selection of mulches, outdoor pesticides, etc.

I'd also like to see some non-food departments, but Kroger Marketplace's poor execution of the concept--with Fred Meyer's increasingly poorer quality of merchandise, stuff that moves slow, a continuing back-n-forth if they really wanted to compete with Walmart or not (for a brief time in the early/mid 2010s, they seemed to be moving in that direction)...isn't the best example to follow, especially as Kroger neuters Fred Meyer and has slowed Marketplace store growth to a trickle.

At the same time, they could probably experiment with Ace Hardware departments as individual stores and Giant Eagle are doing, but I'm not sure how they can do that on a one-to-one store basis, when United picked up some stores from Lawrence Bros., the Ace departments they had were removed, but then again, some of the stores were already small and had downscaled food to fit the department in.
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by storewanderer »

Albertsons had a very good year and they clearly took the opportunity they had in 2020 to try to build market share by increasing staffing, running strong promotions, and taking some opportunities to build/remodel stores.

They had some problems with in-stock during the pandemic but they seemed to recover fairly quickly from that.

Pricing is an issue and seems like that is not changing. With upcoming inflation the pricing issue they have is going to be even more challenging. They still run a good price cut program in my market but it seems to be a rare program not being run in many other places and they have gone back on various prices especially lately.

I think their perimeter departments are above average- produce, floral, bakery, and deli. Curiously in the case of Safeway the one department that seems to be below average to poor is meat. Their selection, meat appearance, pricing, and package options are some of the worst of any chain. In some regions meat freshness is also a problem at the Safeway banner specifically.

Private label program is a mess and needs a lot of work.

Albertsons has not been as successful at taking customers from Kroger as I would have expected them to be. I really think the poor private label program and bad pricing are serious liabilities for them and until they address these things they will really struggle to take back the share that they have been losing to Kroger for the past decade. The club card program needs to go away or at minimum not be tied to shelf pricing, but seems to exist to please Wall Street. Unfortunately I think one of the reasons they are converting some stores from Albertsons to Safeway is so they can bring in the club card pricing.

Albertsons is parceling off upwards of 5,000 square feet in new builds for Drive Up and Go fulfillment and mini-warehouse type areas for high turn high fulfillment items. I don't see 90,000 to 100,000 square foot stores in their future except in some unique circumstances like Boise. They seem comfortable with the 60,000 square foot model which is on the small end for, say Jewel Osco, but on the large end for Safeway.
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by storewanderer »

pseudo3d wrote: May 14th, 2021, 10:16 am This isn’t good....

https://www.foodtradenews.com/2021/05/0 ... zed-model/
It may help them if they can improve pricing. Some of these poorly run anti-customer divisions on pricing are really hurting the company's serious need to improve center store sales and grow basket size, especially Vons. Based on what I see currently, the Vons division has the worst pricing in the entire chain (even worse than NorCal) on center store grocery and drug. And SoCal is a very competitive market. This chain has pricing issues in every market it is just a question to what magnitude. Some markets like OR/WA/AZ/CO they're pretty close on price, easily within 10% now, of others. Other markets they are still way out of line. Maybe this centralized merchandising operation will work to get prices down across the whole company.

What is funny is about a week and a half ago NorCal dropped thousands of price cuts division wide on "Signature" brand center store grocery items. They are still easily 20%+ above a Kroger type of price scale, but at least more in line with how Raleys and Save Mart price private label items now. I had wondered if that was a company wide effort or a NorCal thing.

Back in 2013 when they decentralized this function the merchandising was so broken because centralized Supervalu had no idea what it was doing and then merging in Safeway the centralized Safeway was a very sophisticated merchandising organization that did a lot of good things, but it was anti-customer and did not listen to what customers wanted and tried to merchandise the entire company as if it was Northern California. At least now they are starting from scratch to build a centralized merchandising operation so let's see where that goes.

I cringe about seeing 15% local/regional products. In places like Jewel, that percentage is flat out too low.
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by HCal »

I feel like Just4U is one of their strongest assets. I know people who shop at Vons for that reason alone. Just4U gives people good deals on a few of their regularly purchased items, which creates the perception of low prices. Then, when they go into the store, they get overcharged on other things :o

The club cards probably provide a treasure trove of data that they can use for merchandising.

Vons definitely still has a pricing problem, but many of their stores are in neighborhoods where customers aren't very price-sensitive.
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Re: Albertsons marks ‘transformational year’ in fiscal 2020

Post by Romr123 »

Vons does have ridiculous pricing, but the Palm Springs store is so pleasant to shop in (the staff is just great) I just shop around the ridiculous prices and go to Aldi for those things. This sounds scary for Jewel, though...after the Dominicks follies one would HOPE they learnt a lesson.
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