The U.S. grocery retail sector is continuing to benefit from consumers’ shift to eating at home during the COVID-19 pandemic.
Albertsons, which operates 2,254 stores under banners such as Safeway, and Vons, is launching an initial public offering to raise as much as USD 1.3 billion (EUR 1.2 billion). The Boise, Idaho-based retail conglomerate plans to list its shares on the New York Stock Exchange under the symbol ACI.
Albertsons made a profit of USD 466 million (EUR 417 million) for its fiscal year ending February 2019, Bloomberg reported.
Despite Albertsons’ success, “the real question facing investors in Albertsons is not how well the company has adapted and performed in the last few months, but rather how prepared it is for the technology disruption it is facing over the next two to three years,” Paul Cuatrecasas, the founder and CEO of M&A and strategic advisory firm Aquaa Partners, said in a statement provided to SeafoodSource. “The looming technological transformation of the U.S. grocery sector means the acid test for the company will be how well it performs in key areas, such as meal-kits, deliveries, autonomous checkouts, warehouse automation, robotics, and even in virtual reality shopping."
Albertsons is not the only major U.S. grocery company that has realized phenomenal growth during the pandemic.
Cincinnati, Ohio-based Kroger, which operates 2,757 stores, realized an extraordinary 92 percent spike in e-commerce sales in its fiscal first quarter, which ended 23 May.
Kroger’s total company sales soared 19.1 percent in the quarter to reach USD 42 billion (EUR 37.5 billion).
The retail conglomerate also hired 100,000 associates due to increased grocery buying during the pandemic.
"The COVID-19 pandemic has dramatically changed the outlook for food retail in 2020 and we continue to monitor, evaluate, and adjust our plans to address the impact to our business,” Albertsons Chief Financial Officer Gary Millerchip said in a press release.
However, “there are still many unknown factors related to the long-term impact of COVID-19 that could influence our financial results for the remainder of 2020,” Millerchip added.
According to Millerchip, those factors include uncertainty surrounding consumer behavior, restrictions and what will be the new normal; potential long-term shift in customers eating more food at home; and “continued investments to help our customers and associates,” Millerchip said.
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