Albertsons Companies Incorporation is a company based in the United States. The company owns and operates a chain of grocery stores in the nation. The company operates over 2200 stores under the Albertsons, Safeway, Vons, Randalls, and a couple of other brands. In these stores, the company sells groceries, alcohol, pharmaceutical products, fuel, and many other household goods.
Why You Should?
- Albertsons is an extremely safe investment option in an investor’s portfolio due to the essential nature of the products that it sells. This investment option is a great way to have stable portfolio returns during tough economic times because the company will report stable operating results during these times.
- Albertsons has been slowly developing its e-commerce capabilities. Once they further build this infrastructure, the company will see younger customers shop at its stores through an e-commerce platform. This will help Albertson’s grow in the future of the retail industry. This will also benefit investors in the company.
- Albertsons can use its position to form new strategic partnerships or acquire companies in order to achieve its future growth goals. Most recently, Albertsons partnered with Google in order to use various AI solutions in order to position itself for the future of the retail industry. This will benefit the company and its investors in the future.
- The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company further expand and improve its operations. This has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 62.46 billion and profits of around 466 million. Both of these metrics are higher than what the company reported in the financial year of 2019 when they had revenues of around 60.53 billion and profits of around 131 million.
Why You Should Not?
- Albertsons faces tough competition in the grocery and retail industry. Some of these competitors include Kroger, Walmart, Costco, Amazon, and many other large and small companies. This competition might hurt the company and its investors in the future.
- Though Albertsons has been improving its e-commerce offerings, the company is still way behind the likes of Walmart, Target, and Amazon. If the company does not speed up this development, it might start to see slowing growth. This will hurt the company and its investors.
- Albertsons currently operates an extremely low margin business. This is not necessarily a bad thing as many grocery chains like Albertsons operate at very low margins. However, any possible headwinds that the company faces might result in a net loss for the company in that specific financial year. This might hurt investors.
I think that Albertsons is a decent long-term investment due to its position as a safe investment option, e-commerce opportunities, possible partnerships and more acquisitions, as well as rising revenues and profits. However, tough competition, slow e-commerce growth, and a low margin business might hurt the company and its investors in the future.