Albertsons CEO discusses retailer’s response to pandemic

In retrospect, Albertsons was a kind of canary in the coal mine to this year’s COVID-19 pandemic.

“We noticed an up in sales at the end of February,” said CEO and president Vivek Sankaran, “and this was an odd phenomenon.” It was odd because February is usually a month when retail sales are slack in the wake of the winter holidays. What Albertsons observed was likely the very beginning of the buying panic at the very beginning of the pandemic.

As soon as that panic arrived, “shelves were empty as customers bought food to stock their pantries and bought up toilet paper,” causing what Sankaran named the “toilet paper trauma.”

He explained that even before COVID-19, there was a “tremendous amount of change and dislocation (in the industry) … We are overstored in grocery (retailers) in the United States so there is fierce competition. The competition is changing and the formats are changing. First there were the mass merchants, then the big box stores and then the discounters.”

All of these forced change onto customers, funneling them to shop the way the industry directed. Sankaran said that because of the pandemic: “Customers have told the industry that they want to shop the way they want to shop, and not how the store wants them to shop … The industry is changing to accommodate that trend.”

When asked if he had a plan going forward when the pandemic arrived, Sandarac replied: “Can you have a strategy for being punched in the face? Because that’s what it felt like.”

Sankaran was speaking to the membership of the Boise Metro Chamber on Dec. 11. Albertsons is the second-largest sole-channel grocery retailer in the country and the tenth-largest overall retailer in terms of revenue. The firm was founded and is still headquartered in Boise.

Like most other business events of 2020, Sankaran’s talk was virtual. It was also nine months late. Originally, the chamber had booked him to speak in March, but as Sankaran said near the beginning of his presentation: “In the first week of March, the world changed around us.”

Describing Abertsons’ response to the pandemic since then, “It’s been a sprint and an obstacle course,” Sankaran said. In talking about how Albertsons responding to the challenges posed by COVID-19, he praised the firm’s front line workers and gave them credit for getting Albertsons through the pandemic safely and with increased sales. In doing so, he outlined how empowering the front line to navigate Albertsons’ pandemic response led the company to a fresh emphasis on a “frontline management approach.”

In an explanation that was evocative of Robert Townsend’s Up the Organization, Sankaran stated that is was the front line that came up with innovations to safely sell groceries and get them into customer hands through new delivery channels like curbside pick-up and delivery: “As a leader, I don’t know everything. Those on the front line, (they) know what has to happen, then and there … So we built our response around those on the front line. They are the team closest to the action (with the knowledge) to make the decisions.”

Sankaran also talked about Albertsons’ efforts to improve the company’s diversity response. “We have an elevated focus on diversity but we still have a long way to,” said the man born in India who currently leads one of the most diverse C-suites in retail. He joined Albertsons in April 2019 after ten years at PepsiCo. Out of the firm’s 300,000 associates, 120,000 are persons of color.

Sankaran also profiled the company, commenting that Joseph Albertson started the chain in 1939 at the corner of State Street and 16th in Boise. There has always been an Albertsons at the location. He also pointed out that with the acquisition of Shaw’s in New England, the oldest store in the Albertsons family of grocery stores was started in 1860 in Boston.

Sankaran wrapped up by saying that Albertsons’ vision moving forward was to be locally great and nationally strong. “I have inherited an amazing company and an amazing culture. We roll up our sleeves and get the job done.”