On Sale This Week at Albertsons

Today the International Council of Shopping Centers reported that Albertsons, the nation's third largest grocer, is considering selling itself as a whole or piece-by-piece. The company, which began in 1939 as a single store in Boise, Idaho, is now comprised of 2,500 supermarket and drug stores across the nation. While the majority of its stores operate as Albertsons, the company also operates the ACME, Bristol Farms, Jewel, Shaw's, Star, and Super Saver supermarket chains as well as the Osco and Sav-On drug store chains.

Many of Albertsons's current woes are undoubtedly related to mismanagement and a poorly executed merger with American Stores in 1999. However, the company's main problem is that it decided to build a supermarket empire at a time when such stores were beginning to face an unprecedented challenge. Wal-Mart continues to increase its share of the grocery business, largely through its Supercenter stores; Albertsons is only the latest once-mighty supermarket chain to suffer at the hands of the nation's largest grocer and the world's largest retailer.

Southern California has been a particularly tough region for Albertsons. It had been a player in the market prior to its merger with American Stores, albiet a minor one. The company's decision to shelve American's beloved Lucky banner throughout California and rebrand those stores under its own name was misguided and resulted in lost sales. Shoppers were also aliented by being asked to forfeit their Lucky "Rewards Card" (Albertsons policy in 1999 was to eschew "loyalty cards") only to be asked to obtain an Albertsons "Preferred Card" only a few years later. Albertsons closed many Southern California units before the prolonged supermarket strike and lock-out, which ran from late 2003 well into 2004, alienated even more customers and sullied the chain's reputation; sales still haven't recovered. Last year Albertsons acquired chic Southern California supermaket chain Bristol Farms in an effort to tilt its stores "upscale" so that they could better compete with Wal-Mart; alas, that move may have been "too little, too late" to salvage the company's fortunes in Southern California or elsewhere.

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Albertsons puts itself up for sale

SCT Newswire

Albertsons said it is considering “strategic alternatives,” including an outright sale. The Boise, Idaho–based supermarket conglomerate has retained Goldman Sachs & Co. and The Blackstone Group as financial advisers to assist in the process.

The company reported a 16 percent gain in gross profit for its first quarter, to $2.81 billion. Total sales also grew 16 percent to $10 billion, while same-store sales rose 1.8 percent.

Albertsons' divisions and subsidiaries operate approximately 2,500 stores in 37 states. Its banners include Albertsons, Acme, Jewel-Osco, Osco Drug, Sav-on Drugs, Shaw's and Star Markets, as well as Bristol Farms and Super Saver, which are operated independently.