The Albertsons own brands and fresh departments drove first quarter 2021 results that the retailer said exceeded expectations.
While some numbers showed declines, year over year, compared with unprecedented shopping levels brought on by the pandemic in 2020, on a two-year stacked basis, Albertsons saw tremendous growth.
Vivek Sankaran, president & CEO of Albertsons, noted, for example, that within digital, the retailer exceeded levels of sales growth by more than 200% in every quarter last year and in 2021 is seeing digital activity keep up. On a two-year stacked basis, digital sales are up 276% in the first quarter.
Looking at same-store sales, while there’s a 10% dip compared with Q1 of last year, on a stacked two-year basis, identical sales growth reached 16.5%.
Sankaran called out fresh foods and own brands as being special drivers of its growth, saying in-store transactions are up over Q1 last year and the focus has been on fresh foods and shoppers eating more at home. He said the fresh department is showing stickiness, outpacing center store sales by 200 basis points on a two-year basis.
Sankaran added that every area of the fresh department is up in sales compared with pre-pandemic levels.
For its private brand program, Sankaran said new 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, up 100 points from Q1 2020, where the retailer’s own brands faced supply chain delays, Sankaran said during the quarterly financial call. He also added a special mention of the Own Brands team receiving recognition from Store Brands and its Game Changers feature.
In other highlights from the quarterly report, Albertsons noted that loyalty members grew by 18% in the first quarter 2021, and it’s on pace to operate 1,950 locations that leverage drive-up-and-go capabilities by the end of Q2 2021, amounting to 98% of its coverage.
Sales and other revenue for Albertsons reached $21.3 billion for the first fiscal quarter ending June 19, while Gross profit margin decreased from 29.8% in Q1 2020 to 29.1% in Q1 2021.
Net income reached $445 million for the quarter, along with an adjusted net income of $518 million, and reported an adjusted EBITDA of $1,308 million.