Albertsons provides an update on its micro-fulfillment digital strategy
Albertsons Cos. is moving ahead with its omnichannel expansion but has pushed some of its expected micro-fulfillment center (MFC) openings into next year, according to CEO Vivek Sankaran.
“We are improving our productivity in our three existing MFCs, and we have plans for an additional four MFCs before the end of our fiscal year, bringing the total of seven.”
In a conference call yesterday on fiscal 2021 second-quarter results, Sankaran said Albertsons plans to open another four MFCs by the year’s end, adding to the three locations already in operation, including two at Safeway supermarkets in South San Francisco and San Jose, Calif. That’s down from the nine MFCs, powered by partner Takeoff Technologies, that Albertsons planned to have by the close of 2021.
“We are improving our productivity in our three existing MFCs, and we have plans for an additional four MFCs before the end of our fiscal year, bringing the total of seven,” Sankaran told analysts on the call. “This is two years less than previously estimated, as the launch of two locations has moved into fiscal year 2022, primarily as a result of delays in construction.”
Sankaran provided the MFC update in a rundown of Albertsons’ progress in its strategic priorities, which include the acceleration of its digital and omnichannel capabilities. In the 2021 second quarter, the Boise, Idaho-based supermarket giant saw digital sales rise 5% year over year, for two-year stacked growth of 248%. That’s come in large part as the retailer has extended the reach of click-and-collect and delivery service, he noted.
Underscoring @Albertsons efforts in the e-commerce space, digital sales are also in the black, up 5% for the quarter and a noteworthy 248% from two years ago. | @pgrocer https://t.co/E7F2UToZlW#retail #Albertsons #earnings
— Brian Numainville (@BNumainville) October 19, 2021
“Digital transformation is an imperative in our growth strategy, as we aim to provide an array of convenient shopping experience for our customers. To this end, we've expanded our Drive Up & Go [curbside pickup] locations to over 1,900 and expect to reach approximately 2,000 locations by year-end,” Sankaran said.
“Underlying the rollout of our digital and omnichannel capabilities is our focus for delivering a superior customer experience, as well as improving profitability over time,” he explained. “For example, in Drive Up & Go, our average wait time for pickup is now down to three minutes. In delivery, we continued to speed up delivery times while reducing delivery cost per order by expanding our third-party delivery store network, and we added DoorDash one-hour delivery to all divisions, with a catalog of 40,000-plus products. And we also announced DoubleDash, allowing customers to combine delivery of a restaurant meal and a grocery delivery in one trip. In loyalty, our integrated loyalty and e-commerce app is now fully rolled out and offers a connected customer experience, with redesigned rewards and other new features.”
