Albertsons Companies (ACI) reported similar comp increases as Kroger for Q4 2022, and it continues to lead on a 3-year basis. CEO Vivek Sankaran is quoted in the press release, “We are pleased with our fourth quarter financial results… [which] were fueled by the rollout of our Customers for Life transformation strategy, which places the customer at the center of everything we do, with the ultimate goal of supporting them every day, every week, and for a lifetime. Against this backdrop, throughout the year, we invested in the following initiatives: digitally connecting and engaging our customers through a frictionless omnichannel experience, differentiating our store experience, enhancing what we offer and where we offer it, modernizing our operational capabilities… As we look ahead to fiscal 2023, we believe we are well-positioned to drive top-line growth by deepening relationships with our customers even as inflation continues.”
The +6% comp lifted trailing-twelve-month (TTM) sales per square foot to $590, excluding fuel and pharmacy. The 3-year comp CAGR exceeded Kroger’s by about +200 bps, which reflects Albertsons greater opportunity to improve sales densities given Kroger’s high bar of $716 TTM sales per square foot ex fuel & pharmacy. Albertsons underlying product gross margin rate declined slightly which may reflect product mix (down-trading), its efforts to put more value into its owned brands, and pricing actions on key traffic driving / price perception categories like milk, eggs, limes, and lemons. As management is no longer conducting an earnings call given the pending merger, it’s hard to know. Another callout from the results includes adding another 1M Just-for-U loyalty members taking the total to 34M, up from 30M at the start of the year. This is a win that we suspect is the result of better loyalty rewards (which shows up as a gross margin pressure).
Visits for all ACI banners were tough for the quarter. However, from the basis of 2019, one can see strong gains for Jewel-Osco and Shaw’s, which has been largely driven by visitor acquisition and increased frequency among existing visitors (adding further validation to Albertsons' loyalty program).
