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08/16/2021

Albertsons enters delivery subscription battle

Grocer joins Amazon Prime, Walmart+ with annual subscription offer and is touting a special deal on private brand purchases to generate trial.
Dan Ochwat
Executive Editor
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Albertsons is all in on digital. 

The grocer launched three new integrated innovations that bring its private brand products and fresh foods into a special delivery mobile app, a more personalized loyalty program and an exclusive unlimited grocery delivery subscription service akin to Amazon Prime and Walmart+.

Albertsons calls the grocery delivery plan FreshPass, an optional subscription service priced at $99 a year or $12.99 a month that gives users free delivery on orders $30 or more in select markets. The service includes free 2-hour grocery delivery and its “Drive Up & Go” curbside experience.

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Walmart charges $98 annually for its Walmart+ service and recently waived a shipping minimum

Demonstrating just how important digital is to the Albertsons’ private label products, the retailer is offering a free 30-day trial of FreshPass that includes 5% off any purchases of its O Organics and Open Nature store brands. 

For its private brand program, Albertsons said during its first-quarter financial call that new store brand launches are setting the table for growth. In Q1 2021, 318 new products launched, notably bulk items like trail mixes and nuts, Open Nature almond butter and Signature Select premium beef patties.

Albertsons is on pace to roll out 800 new items this year and registered 25.2% sales penetration for own brands.

For FreshPass, the service is being integrated into the Albertsons mobile apps, including a new app debuting called Deals & Delivery. The app includes features that better suit digital shoppers like a digital wallet, app coupon integration, list builders and the ability to pay from the app. The app also integrates the subscription service in one place and is integrating an improved loyalty program.

The app will house even more personalized deals, rewards and perks for shoppers enrolled in the Albertsons for U loyalty program, a program that the grocer can leverage to promote its private brand products to its shoppers. The app can make it easier for shoppers to add own brands to their shopping list for delivery, find deals on own brand products and get personalized suggestions from new private label products.

Boise, Idaho-based Albertsons operates stores across 34 states and the District of Columbia with more than 20 well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci's Food Lovers Market. The Albertsons for U loyalty program uses the banner’s name, for example, Safeway for U or Jewel-Osco or U.

It’s free to sign up for the loyalty program and new members immediately get $5 off their next in-store or online purchase of $25 or more.

Albertsons has been very active in the digital space this year, teaming up with Uber Eats last month, and before that teaming with DoorDash to deliver groceries, offering more than 40,000 grocery items, including its private brand assortment. 

Another innovation, Albertsons tested a remote-controlled delivery cart from Tortoise at a Safeway store. The cart delivers last mile groceries, holding as much as 120 lbs.

It’s also tested an automated, robotically-powered, contactless grocery pickup kiosk via Cleveron and has been working with Google to explore AI and more improved digital ways of shopping. 

“We have been working hard to revolutionize Albertsons Companies’ digital offerings and enhance all aspects of the food experience and journey,” said Chris Rupp, EVP and chief customer and digital officer, Albertsons. “We have been in lock-step with our customers and today’s launch of our new Deals & Delivery app, our Albertsons for U loyalty program and FreshPass subscription service exemplifies our commitment to innovation and customer service, meeting shoppers where they want to shop whether that be in store, curbside, or at home."