THE FRIDAY 5: Instacart CEO to Depart; Rite Aid Files 2nd Bankruptcy

1. Whole Foods Objects to Unionization Effort

PG readers this week were most interested in Whole Foods Market’s objections to an employee unionization effort in Philadelphia. Workers at the city’s flagship Whole Foods store voted to join UFCW Local 1776 back in January, forming the first union for the supermarket chain. 

Whole Foods has argued that the results of that vote should be overturned, alleging the union made promises and provided free car rides that prevented a fair election, and that a ruling by the agency’s Democratic members deprived the company of its rights. The union has denied wrongdoing. 

On May 1, a National Labor Relations Board regional hearing officer rejected Whole Foods' arguments, affirming that the January election was conducted fairly and legally. The decision, which recommends that the NLRB move forward with certification, is subject to appeal. 

“This is a preliminary report, not a ruling on the objections we’ve filed, and we remain confident that our objections will ultimately be upheld as the full process plays out,” Whole Foods told PG in a statement.

2. Albertsons Expands Business E-Comm Operations

News came in this week that Albertsons Cos. is growing its business e-commerce platform, allowing companies of all sizes, including K-12 schools, local government and community organizations, to order food and breakroom supplies, as well as cleaning and paper products, from their nearby supermarket. 

The option is now available at more than 2,000 locations under the company’s Albertsons, Safeway, Acme, Jewel-Osco, Shaw’s, Star Market, Vons, Pavilions, Tom Thumb and Randalls banners.

“Albertsons Cos. is well positioned to meet the needs of business customers, so they can spend their time running the business, not errands,” said Stephen Menaquale, SVP e-commerce. “We saw an opportunity in the market to reach this important customer base and foster customer growth by leveraging our extensive store network and diverse product selection. E-commerce is a top priority for Albertsons Cos., and the enhancement of our business platform underscores its critical role.” 

3. Instacart CEO Set to Depart as Company Reports Q1 Growth

Instacart shared this week that CEO Fidji Simo is poised to leave the company to take the helm at OpenAI Applications. In a May 7 letter to employees, she explained that her departure is not immediate, and that she is working with the board of directors to ensure a smooth transition once her successor is named. 

In a statement, the Instacart organization noted that the board has regularly engaged in succession planning and intends to pick a CEO soon from its own roster of senior executives. 

“Today’s announcement is not a reflection of any changes in our business or operations,” the company said. “We’re off to a strong start in 2025 as we continue to execute on our vision of building the technologies that power the future of grocery for our partners.”

That strong start to 2025 was also reported this week, with the grocery tech company beating analyst expectations in Q1, posting revenue of $897 million versus projections of $838.5 million for a 9% YoY lift. Net income came in at $106 million and adjusted EBITDA hit $244 million for the period. 

In another key indicator of business health, Instacart reported that orders rose 14% YoY, the fastest pace in 10 quarters. 

4. Grocery Outlet, Ahold Delhaize, Ingles Markets Share Earnings

A bevy of grocers shared earnings reports this week, starting with Grocery Outlet, which turned in results slightly above its expectations in Q1 even as it undertakes a restructuring plan to improve long-term profitability. The value retailer saw YoY net sales increase by 8.5% to $1.13 billion, and comparable store sales increase by 0.3%

Gross margin was 30.4% compared to 29.3% YoY, while selling, general and administrative expenses rose 9.1% to $331.1 million. Grocery Outlet opened 11 new stores and closed one store during the reporting period, ending Q1 with 543 stores in 16 states.

Retail conglomerate Ahold Delhaize also reported robust Q1 results this week, and saw net sales of €23.3 billion (US $26.5 billion), an increase of 5.0% at constant exchange rates and of 7.1% at actual exchange rates. The company’s online sales grew 13.7% at constant exchange rates, and U.S. banners Food Lion and Hannaford continued to lead brand performance, delivering 50 and 15 consecutive quarters of positive sales growth, respectively. 

Ingles Markets, meanwhile, did not fare as well in its own Q2. After profits suffered in its first quarter due to the effects of Hurricane Helene, the company saw net sales total $1.33 billion for Q2 ended March 29, a YoY decrease of 2.7%.

Gross profit for Q2 totaled $311.0 million, or 23.4% of sales, compared with last year’s $321.9 million, or 23.5% of sales.

The disappointing profits come as the regional food retailer continues to deal with Hurricane Helene's aftermath. Ingles estimates that approximately $55 million to $65 million of revenue was lost during the three-week period immediately following the storm, and during Q1, the company incurred approximately $5.4 million in cleanup and repair costs caused by the hurricane.

5. Rite Aid Files 2nd Bankruptcy

Following a news report that it is laying off staff and allegedly headed to bankruptcy court for the second time in less than two years, Rite Aid announced this week that it is actively pursuing a sale of all of its assets. The company confirmed on May 5 that it has started voluntary Chapter 11 proceedings to speed a sale. 

In addition, the company said it has secured $1.95 billion in new funding from existing lenders to help attract a buyer or buyers. CEO Matt Schroeder said the pharmacy company is working diligently to keep the business viable. 

“For more than 60 years, Rite Aid has been a proud provider of pharmacy services and products to our loyal customers,” he said. “While we have continued to face financial challenges, intensified by the rapidly evolving retail and health care landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirors.”

Continued Schroeder: “As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.”