The Checkout: Albertsons Files IPO, IRI Tracks Center Store Growth

Welcome to The Checkout: an express lane for weekly news you need to know, always 10 items or less.

Albertsons Files IPO; Kroger Reports Q1 Digital Sales Grew 92%

Pointing to its success during the pandemic as a sign of market strength, retailer Albertsons yesterday announced its initial public offering (IPO), with 65.8 million shares priced between $18 to $20 each.

In the company’s filing to the Securities and Exchange Commission (SEC), Albertsons president and CEO Vivek Sankaran said the grocery chain gained share in most markets during the first months of the pandemic and that its crucial role in communities was “evident” as it prioritized worker safety “to meet unprecedented levels of demand.”

“We believe that our competitive position will continue to strengthen as a result of customer receptiveness to our response to the challenges of the pandemic and the strength of our supply chain,” Sankaran said. While the pandemic has slowed down some company initiatives, Sankaran said Albertsons still aims to reach a target $1 billion annual run-rate by the end of 2022.

Another major grocery chain, Kroger, also reported strong results in its first quarter earnings report released Thursday.

The company reported 19% comparable-store sales growth, a 40% year-over-year increase, during the quarter ending May 23. Net sales hit $42 billion, up 12% from last year, and both April and May’s sales grew in the triple-digits, CEO Rodney McMullen said. Additionally, the Kroger’s private-label brands grew 21.1%, driven by plant-based brand Simple Truth, which grew over 32% in Q1.

Much of that growth was fueled by online sales, which grew 92% in Q1. Over the last several years, Kroger has made “significant investments to establish a seamless digital ecosystem,” McMullen said, and now has 2,000 pickup locations and 2,400 delivery locations reaching 97% of its customer base, many of whom plan to keep using e-commerce moving forward. Additionally, McMullen said the company is seeing repeat online purchases from new Kroger consumers.

“These investments helped Kroger deliver improved results in 2019, a strong start to the quarter, and very much came to the forefront as we provided our customers with the fresh food and essentials they have needed during the pandemic,” he said.

Doordash Announces $400M Series H Raise, Partners with CVS

Grocery and restaurant delivery platform DoorDash this week announced a $400 million capital raise led by Durable Capital Partners LP and Fidelity Management & Research Company, as well as existing investors.

The company, now valued at $16 billion, said the funds will be directed toward the development of new products and services, improvements to the shopping experience and supporting its employees.

“DoorDash has pioneered a unique logistics platform that facilitates the delivery of food, groceries, and household essentials and has become ingrained in the lives of local communities as an essential service,” said Henry Ellenbogen, managing partner and chief investment officer of Durable Capital Partners LP.

DoorDash launched grocery delivery services with Walmart in 2018 and has since expanded to include independent and specialty retailers like Piggly Wiggly and LifeThyme Natural Market. The platform this week announced a new partnership with CVS to deliver 3,000 non-prescription essentials, including packaged food items like milk products, breakfast bars, mixed nuts, cereals and packaged cookies. The partnership will roll out in Dallas, New York City and Philadelphia before expanding nationwide later this summer.

IRI: Continued Center Store Growth

In a webinar this week, research firm IRI reported that center store item sales are up 22% year-over-year as consumers continue to eat at home more often.

Even as stay-at-home orders have been relaxed in many areas, IRI expects center store purchases to continue growing by double digits in the nearterm: 53% of consumers plan to cook at home more frequently than they did pre-pandemic. Most center store items, including snacks, baking, dinner and breakfast foods, are still seeing dollar sales growth, while baby and lunch items have softened recently, said Sally Lyons Wyatt, EVP and practice leader for IRI.

Additionally, 22% of consumers say they want healthier eating habits as a result of the pandemic; as such, the opportunity in both shelf-stable and frozen products that feature antioxidants and vitamins C and D is growing, according to Thea Bourianne, senior solutions consultant and registered dietitian for Label Insight. As consumers experience increased stress, center store foods with magnesium also grew 12-fold in dollar sales over 2019 from March 8 to April 26, and cannabidiol (CBD) products saw dollar sales growth eight times higher than in all of 2019.

As spring holidays like Easter and Passover were spent at home, some seasonal items actually benefited: sales of Passover products increased 5% as more gatherings took place via Zoom, IRI’s report found.

But as consumers found rampant out-of-stocks as well as price increases for 6.5% of center store products, some turned to private label, which has still seen strong growth in recent weeks.

Impossible Croissan’wich Goes Nationwide; Beyond Meat Launches Value Packs

After a test run earlier this year in select markets, Burger King will launch its Croissan’wich breakfast sandwich, made with Impossible Foods’ plant-based sausage patties, nationwide for a limited time. The move makes Burger King the first national restaurant to offer an Impossible breakfast sandwich, which is served on a toasted croissant, after the chain rolled out its Impossible Whopper last April.

While its plant-based sausage remains a foodservice-only item, Impossible Foods’ plant-based beef products have moved far beyond restaurants. Already this year the company increased its retail footprint 20-fold to over 3,000 stores, including Albertsons, Kroger and Wegmans. The brand also launched a new e-commerce site earlier this month which offers new larger packs, ranging from $49.99 for four 12 oz. packages to $69.99 for 20 quarter-pound patties, via two-day delivery.

Aiming to highlight the affordability of its products, this week plant-based brand Beyond Meat announced plans to launch its own value pack. Deemed a ‘Cookout Classic,’ the 10-pack will debut next week at retail for $15.99, and will be introduced into the freezer sections of most Walmart and Target stores, running through mid-August or while supplies last. The company last month announced a shift towards “aggressive pricing” after demand ramped up during the pandemic. According to SPINS data cited by the brand, Beyond Meat was the top-selling refrigerated plant-based meat for the four weeks ending May 17.

“This forward-looking pricing represents an important milestone along our journey to make Beyond Meat more accessible to all consumers,” founder and CEO Ethan Brown said.