Grocery Winners and Losers of Q2
One of the biggest beneficiaries of the pandemic has been grocery chains. In mid March, customers flocked to the local stores to stock up on everyday essentials, especially toilet paper and cleaning supplies. Even though the Great Toilet Paper Shortage of 2020 is over and manufacturers have been able to keep shelves full, you can still walk through a given store and not be able to buy Clorox wipes and other disinfectants.
But now that business as usual is returning in at least some capacity, a few businesses aren’t getting the same boost as a few months ago. However, it’s hard to be a grocery store and be doing terrible in 2020.
Albertsons’ first fiscal quarter ended on June 20, 2020 and almost doubled adjusted EBITDA from Q1 2019 to $1.7 billion. Digital sales grew 276 percent and same-sales grew 26.5 percent.
COVID-related expenses totaled about $615 million. So although it was a strong quarter, investors were hoping for a better outcome.
Sam’s Club (owned by Walmart)
The bulk-food retailer and Costco competitor only grew comp sales by 1.2 percent with decreased tobacco sales negatively impacting revenues. Although, e-commerce grew 35 percent.
The country’s largest grocer beat expectations and continue to invest in digital technologies. Company sales excluding gas were $42 billion for its first quarter ending on May 23, 2020. This is up from $37 billion for the same period last year. Digital sales almost doubled with its Online Grocery Pickup (formerly known as ClickList) and Kroger recently announced that it would be expanding its delivery platform Kroger Ship.
Whole Foods / Amazon grocery (AMZN)
Similar to most retailers, Amazon’s online grocery business skyrocketed through the pandemic. For Amazon, that looked like tripling those sales compared to last year.
Attributable to that jump is that Amazon was able to triple the number of grocery-pickup locations increase its grocery delivery capacity by over 160 percent. Jeff Bezos increased his net worht by about $48 billion from March to June of this year.
The Florida-based grocery chain grew sales 21.8 percent for the second quarter with net income of 1.4 billion. While Publix shares are not publicly traded (but available to employees and board members), they were priced at $54.35 on August 1 compared to $50.10 on May 1.