Grocery giant Albertsons files for IPO as sales continue to grow

Boise, Idaho-based Albertsons, the nation’s second-largest supermarket chain with more than 2,200 stores, filed for an initial public offering late on Friday. The company has been owned for the past 14 years by private equity firm Cerberus Capital Management.

In the filing to prospective stockholders, president and CEO Vivek Sankaran wrote, “When I joined Albertsons from PepsiCo in April of 2019, I found a company that was well-positioned to benefit from changes affecting shopping and eating habits. The banners that make up Albertsons have earned customer loyalty over decades. Yet, in many ways, our Company is only a few years old. Since the Safeway merger in 2015, we have successfully completed the integration of our stores, supply chain and technology platforms. We have invested in capabilities allowing us to serve the customer wherever, whenever and however they choose to shop. We now benefit from one of the industry’s largest networks of First-and-Main, food retail locations with leading market shares in valuable and growing markets. It allows us to serve our customers locally, while delivering the advantages of national scale.

“All of these elements have come together in a corporate identity that is customer focused to make the shopping experience Easy, Exciting and Friendly. We have developed a robust strategic framework to support this identity, resting on the four pillars of Growth, Productivity, Technology and Talent and Culture. These pillars equip us to win in our sector. I believe we can deliver attractive and improving financial performance, grow market share and increase customer lifetime value through more engaged relationships across our omni-channel platform and loyalty ecosystem.”

Related:Albertsons tallies identical sales gains in Q3

He concluded, “We are proud of the progress we have made over the past few years, and believe we have a long runway for growth ahead of us. At Albertsons, we are just beginning the next chapter in our rich history, and we welcome you to join us on this exciting journey.”

After Albertsons’ 2015 merger with Safeway, investors tried to take the company public, looking to raise as much as $1.6 billion in an IPO, but then pulled the offering amid lackluster market conditions for retail stocks in late 2015. In 2018, the company attempted to go public with a $24 billion merger deal with Rite Aid Corp., which fell apart due to investor pushback in August 2018.

Underscoring Albertsons’ predicament after the failed Rite Aid deal, a month afterward the company promoted president Jim Donald to CEO and then, six months later, hired Vivek Sankaran from PepsiCo to take over the CEO role. Those developments gave industry observers a negative view of Albertsons’ growth prospects.

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Now, after less than a year at the helm, Sankaran (left) has re-established the supermarket giant as a force to be reckoned with. In its third-quarter earnings report on Jan. 7, Albertsons notched its eighth straight quarter of identical sales increases and reported improved operating results for its fiscal 2019 third quarter.

"Our identical sales momentum continued in the third quarter, as our core business continues to deliver strong growth," Sankaran said at the time. "We are focused on providing our customers with an easy shopping experience, exciting merchandise and friendly customer service in our omnichannel shopping environment, and creating deep and lasting customer relationships."

"Our productivity and cost reduction initiatives are also beginning to take shape, which we intend to use to fund strategic growth investments, offset cost inflation and support earnings growth," he added.