The Albertsons Cos. has become the largest traditional grocery retailer in the United States to launch a subscription service for unlimited free delivery.
The company announced the launch of its new FreshPass membership today as part of an omnichannel "reintroduction" to shoppers. Its new FreshPass initiative joins two additional launches today: a free Deals & Delivery app and an “Albertsons for U” shopper loyalty program.
“We have been working hard to revolutionize Albertsons Companies’ digital offerings and enhance all aspects of the food experience and journey,” said Chris Rupp, EVP and chief customer and digital officer. “We have been in lock-step with our customers and today’s launch of our new Deals & Delivery app, our 'Albertsons for U' loyalty program and FreshPass subscription service exemplifies our commitment to innovation and customer service, meeting shoppers where they want to shop whether that be in store, curbside, or at home.”
Albertsons' new FreshPass is an optional subscription service integrated into the retailer's existing apps. The membership is available for $99 a year (or $12.99 per month) and offers unlimited free delivery on orders $30 or more, and in select markets, free two-hour grocery delivery and Drive Up & Go shopping experiences. Albertsons is offering a free 30-day trial and numerous perks for subscribers, including 5% off the company's popular private brand O Organics and Open Nature products. Subscribers will also enjoy rewards that do not expire and exclusive culinary and wine experiences. The grocer says customers who sign up now can expect to save up to $395 per year with an annual FreshPass subscription.
The digital offering from Albertsons comes a year after Walmart introduced Walmart+, which costs $98 a year for delivery, savings on gas and a touchless payment option. Amazon's Prime membership costs $119 per year and has nearly 150 million members.
In July, Albertsons announced that it plans to more than double the availability of its grocery delivery service in the United States this year via a 1,200-store partnership with the Uber. In June, Albertsons announced a deal with DoorDash to offer on-demand grocery delivery from nearly 2,000 Albertsons stores. It is unclear how the FreshPass program will affect the Uber and DoorDash initiatives.
Albertsons is also aiming to raise the bar with new personalized deals, rewards and perks from a new loyalty program called Albertsons for U. According to Albertsons, the program encompasses the best of the previous loyalty program, just for U, and existing members are automatically enrolled. The program carries the name of each respective banner store within Albertsons Cos. – i.e. Albertsons for U, Safeway for U, Jewel-Osco for U, etc. Membership is free, and new members immediately earn $5 off their next in-store or online purchase of $25 or more of qualifying items. After that, members earn points on nearly every dollar spent and points can be redeemed on groceries and gas. Perks include personalized deals, a free item every month, a special birthday treat and more.
Finally, the company is rolling out a new Deals & Delivery app combining Albertsons’ two most used services allowing customers to shop, save and redeem rewards all in one place – from the comfort of their homes or while shopping in-store. The new app integrates both the Albertsons for U loyalty program and the FreshPass subscription service program. Shoppers can download the app by store name across Albertsons’ 20-plus banners, including Safeway, Albertsons, Tom Thumb, VONS and Jewel-Osco. The Deals & Delivery app features a digital wallet and app coupon integration, list builders and a convenient pay-from-app functionality.
The digital news from Albertsons comes a week after the grocery retailer named a new president and CFO. Sharon McCollam will fill the new CFO role on Sept. 7, reporting to CEO Vivek Sankaran. McCollam will succeed Bob Dimond, who will be retiring and will remain with the company as an adviser through February. With McCollam, Albertsons is building one of the most diverse C-suites in the grocery industry; McCollam joins COO Susan Morris and CMO Jennifer Saenz.
McCollam, 59, retired from Best Buy in 2016 where she served as EVP, chief administrative and CFO. She is broadly recognized as the co-pilot of Best Buy’s Renew Blue transformation, which has been regarded as one of the foremost omnichannel transformations in the retail sector.
“I am thrilled to have Sharon join the Albertsons team,” Sankaran said. “We are entering the next phase of our transformation, centered on building deeper relationships with customers through data, technology, and connected omnichannel solutions. Sharon has done just this throughout her career, helping to engineer multiple retail transformations, including the spectacular turnaround of Best Buy and the digital transformation at Williams-Sonoma. Sharon is well-known for her expertise in retail operations and digital growth strategies as well as her passion for building customer-centric cultures. I look forward to working closely with her to architect the evolution of our strategy and create value for all of our stakeholders.”
Prior to Best Buy, McCollam held several transformational leadership positions at Williams-Sonoma Inc. from 2000 to 2012, including COO and CFO from 2006 to 2012. Since retiring from Best Buy, McCollam has served as a member of several corporate boards, including companies with a strong consumer, e-commerce and health care presence.
As president and CFO of Albertsons Cos., McCollam will assume several leadership responsibilities, including finance, corporate strategy, information technology, supply chain operations, and property development, and will be involved in all aspects of the company’s growth and transformation strategy. In addition to her proven financial leadership, McCollam brings broad retail and omnichannel operational expertise that will help accelerate the achievement of the company’s goals.
“I am thrilled to be joining Vivek and the Albertsons leadership team during this exciting time in the company’s history," McCollam said. "Albertsons Cos. is a family of iconic brands that empowers and values its people, obsesses over exceeding the expectations of its customers, communities and associates, and operates at the highest levels of humility and integrity in everything it does. It is thriving because its culture is built on values that its people and communities cherish and want to protect. It is a privilege to be joining this incredibly high-performing team and to be stepping back into such an exceptional opportunity that will allow me to leverage my broad multi-brand, multi-channel, and transformation experience as well as participate in one of the most exciting customer-centric digital transformations in integrated grocery and pharmacy today. I could not be more excited to take on this challenge and create the kind of change that will inspire our associates, our customers, and our shareholders.”
McCollam's appointment came a week after the retailer reported a drop-off in sales from last year during the first quarter sales growth compared to pre-pandemic 2019.
According to the company, sales and other revenue for Albertsons in first quarter reached $21.3 billion for the first fiscal quarter ending June 19. That stacks up against $22.8 billion for the same period in 2020 and $18.7 billion during the first quarter of fiscal 2019. On a two-year stacked basis, then, identical sales were up 16.5%. Gross profit margin dipped slightly, down from 29.8% in Q1 2020 to 29.1% in Q1 2021. For the first quarter of 2019, gross profit margin was 28%. Albertsons attributed an increase in gross profit margin of 10 basis points to higher pharmacy margins amid the administration of COVID-19 vaccines, productivity initiatives related to the optimization of promotions and growth in the company’s Own Brands’ penetration.
Boise, Idaho-based Albertsons operates 2,277 retail stores with 1,725 pharmacies, 400 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. The company’s stores predominantly operate under the Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Kings Food Markets and Haggen banners. Albertsons is No. 8 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.