As much as we all want something dramatic to come of this strategic review -- and believe me, so do I -- I think the most reasonable prediction is a rather conservative one. To me, the most likely outcome is (if anything at all) minor changes: some store closures of a few stores here and there, possibly some small acquisitions of a few stores here and there, probably some renovations at the stores that haven't gotten any yet, maybe a few partnerships with assorted tech-based companies, maybe warehouses or offices being consolidated and so on. I think it's also likely there will be changes of ownership (as Cerberus, Kimco, and others want to get out) but that would not necessarily lead to any changes on the front-facing side.
It's possible that Albertsons is looking to sell off an unprofitable or lower-profit banner or division, but that's a trickier call that you couldn't exactly make without knowing all the information. What we do know is that Albertsons is doing extremely well, and consistently outperforming their own and financial analysts' expectations. That's good news, but it doesn't mean that there aren't unprofitable banners or divisions. The question becomes: where is the greater earning potential, in selling a chain or in ongoing operations of it? Yes, Albertsons is several billion dollars in debt, but that doesn't matter as long as they are able to continue operations and not let that debt grow. If the company forecasts that there is significant growth potential, it doesn't make sense to sell the chain, it makes sense to focus on executing that growth. Look at ACME -- it's not the most profitable chain in the world, but its growth (
https://www.winsightgrocerybusiness.com ... s-suggests) over the past few years is impressive. Is there that potential in other chains, and is that growth sustainable? So far, it seems that it is, making it unlikely that ACME for one would be sold off for overall streamlining. A more likely scenario involving sale would be for Albertsons to continue, as I believe they have been, selling off real estate rather than the store operations. Again, we don't know how much real estate they still own, so it's hard to say how much more profit potential that has.
As far as acquisitions, I'd love to see an Albertsons-Whole Foods or Albertsons-Sprouts or Albertsons-anything else acquisition as much as the next guy, but I think for the most part those dramatic acquisitions are highly unlikely. I think ClownLoach makes some very convincing arguments about the potential for a Whole Foods takeover, but at the end of the day, how likely is that, really? I have no real argument against that suggestion other than a gut feeling that it's just not going to happen, although of course it may.
And as for the language used in the press release, I do agree that it contains none of the usual hallmarks of the corporate jargon indicating downsizing. There's no "maximizing labor efficiencies," no "reducing distribution redundancies," and so on. I suspect that any major closures or sales with the potential effect of large-scale closures would be foreshadowed for PR reasons, so that the public, unions, and others have a suggestion in advance that there may be something like that happening.
That all said... there's one line in the press release that stands out to me. The quote from Chan Galbato contains the phrase "an ongoing focus on accelerating our transformation strategy." My inclination is that Albertsons' long-term strategy does not include a breakup of the banners or divisions, but instead more likely includes renovations, improved e-commerce, and so on and so forth. If they are positioning this as supplementing what they're already doing, I find it hard to believe they'd be aiming for large-scale sales, but of course I could be wrong!
