Dive Brief:

• Albertsons recorded same-store sales growth of 12.3% during the third quarter compared with the same period in 2019, the supermarket chain announced Tuesday. Net sales for the quarter, which ended Dec. 5, were up 9.3% year-over-year, to $15.4 billion.
• The grocer posted a 225% increase in digital sales during Q3, and its Drive Up & Go pickup service grew more than 800%. The company rolled out the service at 231 new locations during the period, and now offers pickup at 1,181 stores, Albertsons President and CEO Vivek Sankaran said Tuesday during the company’s earnings call.
• Sankaran said he recognizes that the strong year-over-year growth Albertsons has been seeing for multiple quarters in a row is unlikely to continue as the pandemic moves into its second year. As a result, the company plans to start measuring its financial performance by looking back two years at a time instead of making year-over-year comparisons, he said.

Dive Insight:

Like other grocers, Albertsons has been working to build lasting relationships with customers as it looks to retain the sales momentum it has enjoyed during the pandemic — and those efforts are continuing to pay off.

The company had more than 6 million new households shop with it during Q3 and saw shoppers return at a higher rate than they did in the previous quarter, Sankaran said. People are continuing to shop less often but spend more on each trip, he said.

As the pandemic continues, though, the company is bracing for its recent financial growth spurt to wind down. 

“We love positive comps, and next year won’t be positive comps,” Sankaran said. “At the end of the day, a lot of things we’re doing are about driving growth, so if you think about it from pure dollars, our intent would be … on a two-year stack for it to be healthier than what it had been pre-pandemic levels.”

Sankaran also addressed recent reports that Albertsons is moving away from handling delivery services on its own. He said the company is not stopping delivery services, but is seeing stronger growth in pickup than it is from its own delivery services and will "continue to double down on that" as a result.

“There are markets where we believe delivery works and there are markets where we don’t believe our first-party delivery works the way we’ve designed it, and we believe there are other options that we should continue to explore … there are always different means and mechanisms that we are going to get things to the customer,” Sankaran said.

Sankaran added that Albertsons is removing self-serve stations like salad bars from its stores and replacing them with refrigerated cases to accommodate the ready-to-prepare meals that are helping drive its sales growth. "From a merchandising standpoint, it’s very focused and targeted. We think of these as modules, and it’s doable," Sankaran said. "The bigger challenge is how to make sure that the production is done right and at a high quality."

Albertsons is also finding that its loyalty programs are an especially effective way to grow sales. Shoppers who are registered with the programs spend two-and-a-half times as much as those who do not participate, Sankaran said during the earnings call.

Correction: A previous version of this story misstated Albertsons’ identical stores growth rate for the third quarter. The actual growth rate was 12.3%.