Albertsons Sees 8.5% Sales Boost Thanks to Higher Prices

Albertsons is a leading grocery store chain with over 2,200 locations across the United States. The company offers a wide variety of products and services, including groceries, pharmacy, health and beauty, and more. Albertsons is committed to providing excellent customer service and offering a convenient shopping experience for its customers.

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Cos. sales rose 8.5% in the recently ended quarter as higher prices for food and other household products continue to boost the grocer’s top line. This is good news for the company, as it indicates that consumers are still willing to spend despite rising prices.

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The supermarket company, which operates its namesake stores as well as the Acme and Safeway chains, said identical sales rose 7.9% in its fiscal third quarter.
Albertsons' gross margin fell slightly from a year ago, due to higher costs for products, supply-chain challenges and increased shrink. Shrink is an industry term for loss in inventory due to theft, spoilage or other factors. Albertsons said it is also facing declining demand for Covid-related products.

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For the three months ended December 3, Albertsons reported earnings of $375.5 million, or 20 cents per share. This is compared to the $424.5 million, or 74 cents per share, that the company posted in the same period a year earlier. When stripping out one-time items such as stock-based compensation and merger-related costs, the company's adjusted earnings came to 87 cents per share. This is higher than what Wall Street analysts had expected.

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Sales for the quarter came in at $18.15 billion, which was higher than the $17.62 billion that analysts had been expecting. This was a strong showing for the company, and it is likely to please investors.

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Albertsons and Kroger Co. have agreed to a merger, which is set to be completed in October. This will make Kroger the second-largest supermarket operator in the U.S.
The companies said that the deal, which is worth about $20 billion, will boost their scale and technology and help them compete better against bigger rivals.
The proposed merger between Amazon and Whole Foods has faced opposition from elected officials, union groups and some independent retailers. Concerns have been raised about the deal’s potential impact on food prices, job security and competition. Executives from both companies testified before a Senate subcommittee in November and vowed to keep prices low and protect workers’ jobs.

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The Washington state attorney general has also sought to block a $4 billion dividend that Albertsons planned to pay its shareholders. The attorney general argues that the payment would hurt Albertsons’ ability to compete with Kroger and other retailers, especially if the merger didn’t go through.

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Last month, a judge in King County Superior Court in Washington ruled in favor of Albertsons and Kroger, allowing the former to pay a dividend. However, a temporary restraining order was issued blocking the payout. A hearing is scheduled for next week to determine the next course of action.

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As the food industry continues to face inflation, the pending merger comes at a time when sales and profits have been boosted, but demand for some items has decreased. Last month, Kroger executives said that while food costs have started to become more moderate, prices on grocery store shelves have not dropped significantly.

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Even as sales volumes fall, food makers such as Conagra Brands Inc. and General Mills Inc. are continuing to raise prices. This is likely due to the fact that these companies are facing increased costs for ingredients and transportation.