Albertson’s Branding Efforts Bolster Market Growth

NEW YORK – Supermarket retailer Albertson’s said Tuesday that its restructuring plan is ahead of schedule and that focused marketing and merchandising programs are helping to strengthen its financial situation.

As part of a plan announced in July to reduce costs by $250 million by the end of second quarter 2002, the nation’s second largest supermarket operation (behind Kroger) opened 24 food stores, 24 drugstores and 15 fuel centers and closed 31 food stores and 29 drugstores. Boise, Idaho-based Albertson’s said it is “on track” to open a total of 80 food stores, 65 drugstores and 65 fuel centers and complete remodeling on 105 stores during the current fiscal year.

“Right now we’re ahead of where I thought we would be at this point in time,” said chairman/CEO Larry Johnston during a third-quarter conference call with investors and analysts. Albertson’s said its net income for the third quarter ended Nov. 1 rose to $176 million after restructuring from $172 million a year earlier.

Although media spend was not announced, Johnston said that marketing and promoting newly branded duel grocery-drugstores in Arizona (Albertson’s-Osco) and Reno (Albertson’s-Sav-on), plus the expansion of its online shopping concept from Seattle to San Diego, also helped bolster the company’s efforts. Albertson’s spent more than $66 million on media in 2000, per CMR. New creative is expected in 2002 from Duncan + Associates, Los Angeles.

“We delivered strong growth and met earnings expectations in spite of increasing economic pressures and aggressive competition from both traditional grocery retailers and a growing number of supercenters,” said Johnston.

— Barry Janoff