Own Brands sales up at Albertsons as consumers eat more at home

Dan Ochwat
Executive Editor
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Strong sales continue at Albertsons, both through its own brands and the eye-popping 243% jump in digital sales that the retailer reported during its second-quarter conference call.

Among its Own Brands, the full line of its Signature mainstream brand saw sales grow by more than 15% in the second quarter, compared with a year ago. Sales of its better-for-you lifestyle brands — O Organics and Open Nature — saw a combined increase of 13.1%. In the quarter, 39 new products were launched under the two brands, adding to its 650 private brand items launched this year. Vivek Sankaran, president and CEO of Albertsons, said during the call that the own brands portfolio is driving growth in under-penetrated markets.

Sankaran also gave a shout out to the own brands team for being recognized as Store Brands’retailer of the year in its October issue, saying the recognition is “a true testament to the own brands team’s dedication and hard work."

The Signature store brand increased sales by more than 15% in Q2; Open Nature and O Organics combined for a 13.1% jump in sales.

Sankaran said Albertsons' Own Brands are playing a key role in Albertsons’ offering of a strengthened product mix that is a key driver of the retailer’s overall success in the quarter. Albertsons reported same-store sales up 13.8% for the 12 weeks ended Sept. 7, revenue increased 11.2% to $15.8 billion for the quarter, and adjusted EBITDA of $948.4 million was 67% higher than Q2 last year.

Sankaran said the sales growth is being driven by consumers eating more at home, using the seafood department as an example of growth by highlighting its 46% jump in sales for the quarter. Another category, floral saw a 20% growth in sales. He added that a segment of shoppers Albertsons calls “cooking from scratch” shoppers were up in sales by 47% across categories, and own brands are feeding into this by focusing on solutions that fit this shopper.

In Own Brands, Sankaran said the Value Corner brand saw large increases in milk and paper products by adjusting an even lower opening price point and by introducing family packs.

He said customers are coming to Albertsons stores less but buying more, and they’re doing a lot more shopping online, driving overall digital sales growth of 243%. The company’s growing Drive Up and Go platform is driving the growth with new customer acquisitions. It’s in 200 stores now but expanding to 1,400 by end of fiscal year. Sankaran said the drive up and go business was up 1,000% in the quarter.

Additionally, the e-commerce team is thriving with delivery of fresh produce and bakery and is testing a two-hour or less delivery.

"We continue to successfully execute against our strategic priorities, which translated into outstanding second-quarter results. We have a value proposition that is resonating with customers and driving market share gains across all of our markets," Sankaran said. "We are in the early stages of a transformation to become a modern, growing food retailer providing a wide assortment of high quality fresh and essential goods to customers, and we remain well-positioned to generate differentiated performance and deliver an excellent shopping experience."

The company also recently launched lockers at select Jewel Osco and Safeway locations. In stores, they’re also adding new technology solutions rolling out a contactless payment option in stores through its just for U loyalty app. A QR code gets scanned off the phone at checkout, applying discounts automatically.