What Are Albertsons' Strategic Needs?

After the closing bell on Feb. 28, Boise, Idaho-based company Albertsons released a statement saying its board of directors has started a review of possible strategic alternatives for the company, including capital return strategies and potential financial transactions. 

Sylvain Perrier, president and CEO of Mercatus, a Toronto-based provider of grocery e-commerce solutions, sees the move as a recognition that major new actions could help the company maintain a robust business for the long term. 

“In the last two years, Albertsons has made significant changes to its business model to adapt and stay relevant,” Perrier said in statement provided to WGB.

Albertsons' U.S. market share "has climbed north of 7%, and according to industry analysts, its long-term earnings growth rate could hit 8%," Perrier added.

Albertsons, which went public in summer 2020 after years of being owned by a consortium led by private investor Cerberus Capital Management, operates 20 banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme and Tom Thumb—a portfolio Perrier believes the retailer should take a closer look at.

“[In] my opinion, given these projections, it is a suitable time for Albertsons to look at underperforming banners, potential strategic acquisitions and doubling down on its omnichannel capabilities,” Perrier stated.

Albertsons said Goldman Sachs and Credit Suisse are serving as financial advisers during the review process and that the board hasn't set a timetable for the review or made any decisions about next steps.

"The board believes the continuing strength of our business and the scale of our portfolio of assets warrants a deep and considered review of all possible paths towards maximizing value creation,” said Chan Galbato, Albertsons board co-chair.