Source: Seeking Alpha
Facing a future without a tie-up with Kroger, Albertsons is taking measures to remain competitive in the low-margin grocery business with fierce competition from retail behemoths Walmart, Amazon, and Costco.
Sell side analysts agree that the path forward won’t be easy and there are significant roadblocks to a successful and stand-alone Albertsons. The company will need to lower prices, increase its investment in technology, and centralize buying.
“The crux of the plan is driving productivity and efficiency savings to reinvest in the business’ most critical and opportunistic areas,” said Morgan Stanley’s Simeon Gutman. He adds that ACI’s transformation plan balances pragmatism and urgency, but the execution carries “a moderate to high degree of difficulty.”
“Going it alone won’t be easy,” the Wall Street Journal said in Tuesday’s opinion piece, as the company’s market share has been shrinking, citing BMO Capital Markets’ data.
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