THE FRIDAY 5: Albertsons Announces Corporate Layoffs; Grocery Outlet’s Eastward Push

1. Grocery Outlet Keeps Pushing East

News came in this week that California-based Grocery Outlet is continuing to grow in Ohio, with three upcoming openings in the northeast corner of the state. The value retailer will hold two ribbon-cutting ceremonies at its newest store in the Cleveland suburbs of Parma and Brooklyn on Jan. 23, with another location near Canton opening its doors on Feb. 13.

The grocer has been steadily pushing east over the past several months. In November, Grocery Outlet opened a new store in the Ohio city of Ontario, located in the Greater Cleveland region. In addition to stores in Boardman and Cincinnati, Grocery Outlet is also planning two new outposts near Dayton, according to reports. 

2. Albertsons Announces Layoffs

In an effort to “compete in a rapidly changing market,” Albertsons will conduct layoffs of support staff at the corporate and divisional level. Store-level employees will not be affected by the layoffs, a spokesperson confirmed. Severance packages will be offered to those affected by layoffs, along with "extended benefits, career support services, and additional resources during this transition.” 

The move comes after a failed merger with The Kroger Co., as well as a rather solid Q3 earnings report, where Albertsons saw net sales and other revenue increase 1.2% to $18,774.5 million for the 12 weeks ended Nov. 30, driven by a 2% rise in identical sales. The company said growth in pharmacy sales helped increase identical sales. Digital sales during the quarter increased 23% during Q3, while loyalty members increased 15% to 44.3 million.

Meanwhile, news also broke this week of Albertsons' new e-commerce campaign that will run through Feb. 26. Featuring a series of 15- and 6-second videos, the campaign spotlights the benefits of online shopping with Albertsons: convenience, ease and value. Videos are running on such national platforms as YouTube, Meta/Instagram, streaming audio, and digital out-of-home. 

3. Vacant Big Lots Stores Up for Lease

Retail focus investment firm Gordon Brothers revealed that it is offering Big Lots leases for sale nationwide, following the completion of its purchase of the U.S. closeout retailer. The purchase enables the transfer of Big Lots’ assets, including its stores, distribution centers and intellectual property, to other retailers and companies. 

Speaking on the leases for sale, Michael Burden, co-head of North America real estate services at Gordon Brothers, said: “This is a fantastic opportunity for expansion-minded retailers to grow their footprint by acquiring well-located stores with long-term, below-market rents. These spaces offer a seamless path to enhance their presence and serve new communities, making it an ideal time to capitalize on prime retail real estate."

The new-to-market stores are primarily located in shopping centers across 47 states and range in size from approximately 19,000 to 55,000 square feet. Since Big Lots' bankruptcy in September, rival discounter Ollie’s Bargain Outlet has acquired approximately 20 Big Lots store leases as a result of the initial bankruptcy sale process. 

4. Behind the Food Retail Value Boom

PG Senior Editor Lynn Petrak spoke with ALDI, Trader Joe’s and Dollar General executives about strategies to entice value shoppers now and in the future, with Dave Rinaldo, president of ALDI U.S., sharing that: “The ability to excite customers is a big part of this. That’s where you see items like our charcuterie range or our organic produce that have really unlocked the magic and the level of customer engagement. It’s hard to even quantify or explain to someone – it’s exciting. People come out with items that they didn’t know that they were coming in for, with great value on a premium item or specialty item, especially at a time like this.”

Speaking of ALDI, the discount grocer also this week released its first-ever “Price Leadership Report” to showcase the savings it delivers for shoppers nationwide. To measure its pricing progress, ALDI commissioned a comprehensive cost analysis to understand the value it's creating for shoppers, finding that it can save consumers $8.3 billion per year when they shop the retailer’s private label assortment. The report also found that 76% of shoppers said ALDI's brands are just as good as name brands.

5. The AI Revolution in Food Retail

For PG’s January cover story, Multimedia Editor Emily Crowe (Hi!) took a deep dive into artificial intelligence at food retail – including where it’s been and where it’s headed. AI is making incredible inroads at food retail, creating efficiencies at scale, reducing operational costs and streamlining myriad processes across the entire enterprise. 

There’s a lot of promise in the newer GenAI, as well, with the combined market for GenAI hardware and applications in 2024 totaling $79.8 billion, and and expected to grow at a compound annual growth rate of 31.1% to $235.5 billion in 2028.

What considerations should grocers make when adding it to their technology stacks, and how can smaller food retailers reap the benefits of this transformational tech? Read more to find out.