Kantar Consulting expects growth to be a challenge for Albertsons in the next few years.
Albertsons ranked 10th on Kantar’s recently released list of top 50 U.S. retailers by 2018 sales, with more than $60 billion in sales.
Kantar expects a sales compound annual growth rate of just 2% for the company for 2018-2023, however.
Elley Symmes, a senior analyst for Kantar, said ownership factors into the forecast for Albertsons.
“They’ve continued to be in a really tough spot, and I think being owned by a private equity firm doesn’t do them any favors, because being owned by a private equity firm, it’s all about returning cash to shareholders and eventually taking that retailer public,” Symmes said, “and so the financials of the company kind of surge in importance over everything else, over investing for long-term growth, over innovation.”
She noted that 2018 has been an innovative year for the company but that Kantar still foresees a difficult path to growth.
“They’ve underperformed over the past years,” Symmes said. “The integration of the business following the Safeway acquisition has been really slow, and we’re just not thinking of them as a real outperformer going forward ... We update these forecasts every six months, so if we start to really see new metrics or new numbers that this retailer is showing, we adjust immediately, but that being said, we aren’t expecting that.
“Their stores are mainstream,” Symmes said. “They’re caught in this world with no real differentiated brand equity that they’re delivering. The online business, again, they’ve invested in it, but it’s been really slow to take off. So those levers that we see other retailers pulling to create a differentiated offering ... Albertson Safeway just isn’t there.”
Albertsons operates more than 2,200 stores, with banners including Albertsons, Safeway, Vons, Star Market, Pavilions, Jewel-Osco and many others.
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