Albertsons Cos. Inc. is serious about being a leading player in the online grocery business
The reason is simple: Ecommerce is growing fast in an otherwise flat U.S. grocery market. For example, the retailer’s online sales jumped 33% in its fiscal first quarter that ended June 15 compared with the comparable period a year earlier, while the grocery chain operator’s total sales were virtually unchanged. And that was a slowdown from the explosive 83% online sales growth the retailer posted in its 2018 fiscal year, which ended Feb. 23.
Albertsons does not break out the dollar amount of its online sales or disclose what percentage of overall sales they represent. However, Internet Retailer estimates Albertsons 2018 web sales at $265.4 million—or about 0.44% of its nearly $61 billion in total revenue. At that level, Albertsons ranks No. 203 in the Internet Retailer 2019 Top 1000.
Albertsons’ online growth stems from the retailer’s robust efforts to rethink and reimagine its 80-year-old business model. For now, that means developing omnichannel capabilities such as buy online pickup in store (BOPIS), home delivery and digital shopping apps. However, the retailer is also looking toward a future in which it finds ways to profitably boost its ecommerce capabilities by investing in automation, working with delivery and technology companies and experimenting with new ways to reach consumers.
Ecommerce has been a bright spot for grocery retailers, which face slow growth in their stores. As of September, online grocery sales grew 15% on a year-over-year basis and accounted for 6.3% of total grocery-related spending by U.S. households, according to retail consulting firm Brick Meets Click. By contrast, supermarket sales grew just 1.5%, according to the most recent data from trade magazine Progressive Grocer.
Ship-to-home orders account for 50% of all online grocery orders with in-store pickup (28%) and home delivery (22%) accounting for the other online orders, according to Brick Meets Click.
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