WSL Future of Health Event

Pandemic drives grocers’ e-commerce, omnichannel volume

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NEW YORK — The COVID-19 pandemic is turning out to be good business for food retailers. While consumers are making fewer grocery shopping trips, they are driving enormous growth in e-commerce and omnichannel options, such as home delivery and store pickup.

Despite, in most cases, making substantial unplanned investments related to the outbreak, international, national and regional grocers reported double-digit sales and profit growth in their fiscal quarters ending in June. For example, Ahold Delhaize Group, which operates stores in Europe, Asia and the United States, posted a 17.1% (15.9% at constant exchange rates) jump in sales to 19.1 billion euros ($22.71 billion) during its second fiscal quarter ended June 28, while net income from continuing operations soared 107.6% to 693 million euros.

The company’s U.S. operation saw its top line grow 18.7% to $13.04 million, driven by a 21% surge in comparable sales. Online sales repeated a trend experienced by other retailers as well, skyrocketing 126.8% to $564 million. Operating profit, meanwhile, vaulted 113% to $786 million.

“Despite the high levels of market uncertainty, we are accelerating investments to support our increasingly digital and omnichannel ambitions and raising our 2020 outlook due to our strong performance in the first half of the year,” said president and chief executive officer Frans Muller.

In the U.S., Albertsons Cos. reported net profit of $586 million for its 16-week first quarter ended June 20, as the top line climbed 21.4% to $22.8 billion. Like Ahold Delhaize, Albertsons Cos.’ top-line expansion was fueled by double-digit growth in identical-store results and its online business. Identical-store sales rose 26.5%, while digital sales skyrocketed 276%.

During the quarter, Albertsons Cos. spent $615 million on pandemic-related measures, including more than $275 million in “appreciation pay,” and invested $402 million on an array of capital projects.

It was a similar story at Lakeland, Fla.-based Publix Super Markets Inc., where sales escalated 21.8% to $11.4 billion and comp-store sales improved 19.9% during the second quarter ended June 27. Net earnings more than doubled, soaring 106.8% to $1.4 billion. The company estimated that the pandemic drove about 16.1%, or about $1.5 billion, of the period’s revenue growth.

Although operating in an intensely competitive Mid-Atlantic region, Sunbury, Pa.-based Weis Markets Inc. saw its second quarter sales gain 23.7% to $1.1 billion, propelled by a 24.1% jump in comp-store sales. Net income doubled, increasing 102.5% to $41.4 million.


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