Albertsons ACI customers can expect higher prices and spotty availability of food, CEO Vivek Sankaran told Yahoo Finance on Monday, but insisted the effects aren't dire for either shoppers or the food chain.
The retailer posted a second-quarter 2021 earnings report that hiked Wall Street expectations, thanks to an increase in digital sales, and smashed its expected growth estimates for fiscal year 2021 outlook.
Even with the economy being buffeted by soaring prices, supply bottlenecks everywhere and a shortage of workers, Albertsons — which has 2,278 stores and serves more than 33 million customers across the nation — saw a same-store sales increase of 1.5 percent this quarter.
Meanwhile, website sales growth has spiked 248% over the past two years, boosted by pandemic-era trends that aren't likely to resume anytime soon. Shares of the company are up 62 percent year-to-date and 100 percent compared to a year ago.
As industries across the world face major supply chain shortages, Sankaran made clear the current shortages are nothing like we saw during the early days of the pandemic. With some stores grappling with empty shelves, Sankaran said consumers can expect the impact on food to be spotty, but not a chronic problem.
We shouldn't be worried when we cannot get food and can't get the items we want. Yahoo Finance says availability is spotty, said the CEO.
He added that the company is giving its customers proper alternatives when they come in to a specific store.
You won't find what you want, but you will find something else, he said. Next week, you might get exactly what you want, because a lot of products are available on any one name. Sankaran said Albertsons is already gearing up for the Thanksgiving holiday to help reduce potential crazes ahead of the holiday months, saying that customers feel ready and comfortable that the product is arriving before the holidays.
That is especially true as we come to Thanksgiving, the other thing we're doing is making sure that we can get product in as soon as we get it, so turkeys are already on the shelves, added the executive.
Sankaran says items facing the most shortages include items like sports drinks, soft drinks, certain laundry and cleaning products and — every so often - key proteins.
Sankaran said that rising prices aren't completely turning consumers off just yet. Rather, food inflation is still manageable for the consumer and manageable for companies like us from a gross margin standpoint and overall profitability perspective — with expectations for it to continue that way in the coming months.
To Albertsons, the emphasis on transformation is key, especially in its digital operation. Integrated Sales : Our omni-channel strategy is built around our stores. people who are comfortable with the quality and the assortment that they've seen in the store now know that the same assortment, he explained. It creates this virtuous cycle where people engage that now they can go to the store when they want to go to a fresh shop or want the experience. And it's paying off, the bill for these traditional customers is actually three times higher than the omni-channel customer, he noted.
If people spend more time with us, just as they do with the other. We're getting market share from somebody else because they are not eating more, the CEO added. I think there is plenty of headroom when we get better at it and as consumers get more used to operating digitally and in-store too. Follow her on Twitter at BrookeDiPalma or email her at bdipalmayahoofinance.com.