As Albertsons looks to reenergize its business in the wake of a difficult quarter, the supermarket company plans to redouble its efforts to hold onto shoppers feeling the most financial stress, executives told investors on Thursday.
Speaking during the retailer’s first-quarter earnings call, CEO Susan Morris said Albertsons has lost lower-income customers to discount competitors and intends to use a combination of targeted price cuts, personalized deals and its loyalty program to try to win them back.
“Our biggest leakage is to the big players — to Walmart, Amazon and to some degree Aldi,” Morris said.
To stem that tide, the company wants to specifically target lower-income customers with price locks and offers that save them money — efforts Morris said she hopes will “maybe keep them from leaking as aggressively to some of the pure price players.”
Morris emphasized that Albertsons plans to make price cuts “very surgically and selectively” and pay for the reductions through “productivity” improvements.
“This is not about broad-based discounting. It’s very targeted, market-specific investments in the areas where we believe customers are making purchase decisions, so it’s around price perception, around fresh, personalization and convenience,” she said.
Albertsons’ stepped-up focus on reaching people with limited grocery budgets comes as the company tries to restore growth following a quarter where it saw comparable-store sales sink by almost 1%. Lower-income shoppers played the biggest role in driving that decline, with that sector posting weakness in terms of both units and basket sizes, President and CFO Sharon McCollam said during the earnings call.
Shoppers at the lower end of the income spectrum have made changes like switching to less expensive proteins even as higher-income shoppers have proved more resilient, said McCollam.
The softness Albertsons has seen among lower-income shoppers is one reason why the retailer lowered its financial forecast for fiscal 2026, McCollam said. The company had expected comparable-store sales growth to be flat or positive for the year, but now believes the figure will be negative.
Albertsons said on Thursday that it has adjusted its operating model as it looks to become more nimble and reduce prices for shoppers. The changes include consolidating its stores into fewer groups and centralizing center store merchandising.
Albertsons also said McCollam plans to retire after serving as Albertsons’ president and finance chief since mid-2021.
As Albertsons looks to the second half of the year, it’s anticipating supplier cost increases, but plans to negotiate with manufacturers to help keep prices down for consumers, Morris said.
“We’re going to be pushing our vendor partners very hard to absorb those costs on their own. We’re being very clear today with our goals on right-sizing our value proposition … We expect them to lean in,” she said.
