Digital and pharmacy sales surge at Albertsons
Albertsons Boosts Identical Sales Growth Outlook for Fiscal 2025
Albertsons Companies, a leading grocery retailer, has raised its identical sales growth outlook for fiscal 2025, citing strong growth in pharmacy sales and a 25% increase in digital sales as key drivers.
In the first quarter of fiscal 2025, Albertsons reported identical-sales growth of 2.8%, with pharmacy sales being the primary driver. Digital sales also surged by 25%, fueled by increased engagement on Albertsons’ digital platforms.
The company’s strategy, called Customers for Life, focuses on investing in core operations and delivering customer value. This strategy appears to be paying off, with loyalty program membership growing 14% due to more rewarding deals and easier ways to earn points, attracting value-conscious consumers.
Albertsons operates stores across 35 states and the District of Columbia under more than 22 well-known banners. The company’s own-brand sales penetration finished the quarter at 25.7%.
The company's optimism is further underpinned by investments in productivity and operational efficiencies, which are fueling growth without sacrificing customer value. Albertsons also benefits from consumers’ increasing focus on value and more at-home eating habits.
In addition to these factors, Albertsons has launched a new own brand, Chef's Counter, to meet growing consumer demand for cooking meals at home with adventurous flavors and globally inspired ingredients.
Profit forecasts, however, remain unchanged due to the lower margins of pharmacy sales and higher costs associated with digital orders. Albertsons’ unchanged expectations include adjusted EBITDA in the range of $3.8 billion to $3.9 billion, adjusted net income per Class A common share in the range of $2.03 to $2.16 per share, and capital expenditures in the range of $1.7 billion to $1.9 billion.
Net sales and other revenue for Q1 rose to $24.88 billion. Albertsons Cos. operates 2,264 retail stores, 1,725 in-store pharmacies, 408 associated fuel centers, 22 dedicated distribution centers, and 19 manufacturing facilities.
The company's positive momentum is not limited to the digital and pharmacy sectors. UFCW members in Southern California voted to ratify a new three-year contract with Albertsons' banners Albertsons, Vons, and Pavilions, which includes considerable wage increases, a new supplemental pension plan, and higher health care benefit contributions.
Meanwhile, Safeway workers in Colorado also reached a deal with parent company Albertsons, including fully funded pension and health care benefits, and improvements to dental and vision benefits.
Albertsons Cos. is No. 9 on The PG 100, Progressive Grocer's 2025 list of the top food and consumables retailers in North America. With its continued focus on customer value and growth, Albertsons expects to maintain this momentum through the remainder of fiscal 2025.
[1] Albertsons Companies Q1 Earnings Report [2] Albertsons Companies Investor Relations [4] Albertsons Companies Customers for Life Strategy
- Albertsons Companies, in its Customers for Life strategy, aims to grow its private label offerings, such as the recently launched Chef's Counter, catering to the lifestyle shift towards more at-home cooking with adventurous flavors.
- To bolster its center store offerings and remain competitive in the evolving retail landscape, Albertsons continues to invest in technology, ensuring seamless integration of digital platforms and sporting goods, as consumers increasingly prioritize convenience and design their lifestyles around various sports activities.
