Dive Brief:

• Albertsons will be stepping up investments in technology across its operations during the coming months in an effort to improve efficiency and boost its results going forward, executives of the supermarket chain said during its earnings call on Monday morning.
• Same-store sales during Q2, which ended Sept. 11, rose 1.5% on a year-over-year basis, while the metric was up 15.3% compared with the same period in 2019, the grocer reported.
• Albertsons will be heavily focusing on upgrading outdated systems as it looks to capitalize on the strong sales momentum it has seen during 2021, Sharon McCollam, the company's newly appointed president and chief financial officer, said during the call.

Dive Insight:

McCollam, a former Best Buy CFO who came out of retirement in September to assume the role of president and CFO of Albertsons, has in her early weeks with the company concentrated on accelerating the grocer's digital related projects, building the grocer's omnichannel capabilities and identifying ways to use technology in stores and along the supply chain to cut costs, she said during the earnings call.

Albertsons is making substantial progress in its efforts to strengthen its operations and keep pace with its competitors, but the company has considerable work ahead as it looks to move away from using outdated technology and rely more heavily on modern, cloud-based information technology systems, McCollam said. 

"From my perspective, these investments create gradual and incremental returns over time … where the company is now is very much on getting out of systems that are old enough to drink and vote in most states and actually putting in platforms that [we] can build on, quickly." McCollam said.

McCollam said she intends to press forward with the initiatives aggressively. "Rest assured that our goal is going to be to accelerate the pace at which we are rolling this out," she said.

McCollam said she is impressed with the efforts Albertsons has made recently to improve its pricing strategy, adding that her experience in the consumer electronics sector has provided her with a solid foundation for understanding the grocery industry.

On the e-commerce front, CEO Vivek Sankaran said Albertsons has brought the average wait time for a pickup order to be brought to a customer down to three minutes. The company's Drive Up and Go service is now available at more than 1,900 locations, and that figure is expected to hit approximately 2,000 by the end of the year, he said.

Sankaran said Albertsons remains committed to its efforts to expand its new micro-fulfillment capabilities. The company expects to have seven MFCs in operation by the end of the year, he said, and has delayed two additional facilities to 2022 because of construction hold-ups. Albertsons has been increasing productivity at the three MFCs it currently operates and believes it is on track to bring down the cost of using the technology to assemble an order to what it costs for a worker to pick an order in a store.

Meanwhile, the grocer has launched more than 400 new private label items so far in 2021, with a goal of bringing out over 800 total items during the current fiscal year, Sankaran said. During Q2, Albertsons introduced 85 new products under its own brands and saw private label penetration rise just over half a percent from the same period in 2020, to 25.2%, he said.