Quiet beat (ACI)
Albertsons reported FQ2 EPS of $.72, ahead of consensus expectations of $.65. ID sales grew 7.4%, above consensus expectations of 5.2% and accelerating from 6.8% sequentially. Digital sales grew 36%.
Gross margins contracted 70bps and were 30bps less than consensus expectations. Fuel and LIFO expenses were responsible for 30bps of contraction. The adjusted gross margin contraction of 40bps was slightly more than the 27bps contraction in FQ1. Product and supply chain costs, digital fulfillment costs, and fewer COVID-19 vaccines were partially offset by ongoing productivity initiatives. SG&A expense excluding fuel leveraged 30bps.
Kimco said it had sold 11.5 million shares in the three days since the merger announcement. The quarterly results take on less importance as the companies prepare for the upcoming negotiations with the FTC.
Online grocery sales decelerate (KR)
Total online grocery sales in the U.S. decreased 3% YOY in September according to Brick Meets Click/Mercatus Grocery Shopping survey, decelerating from -1% in August. Pickup, the largest component of online grocery shopping, had a 6% YOY decline. Pickup MAUs decreased by 2% in Q3. Order frequency also decreased in August and September leading to a 1% decline in Q3. Average order value (AOV) increased each month driving a 4% gain for Q3.
In Q3, online grocery sales grew nearly 4% driven by 20% growth in delivery. Delivery’s AOV increased by 12% for Q3 while MAU increased by 6%. Delivery benefited from new service options from national providers and new third-party providers.
Ship-to-home sales decreased by 19% in September and 17% in Q3. MAUs decelerated throughout Q3 with September’s 11% decline outpacing the 6% decline in Q3. Order frequency had a similar trend with an 11% decline for September and a 7% decline for Q3. The AOV decreased by 5% in Q3.
The future of grocery delivery could be challenged by the Labor Department’s recent proposal to reclassify gig workers as employees instead of independent contractors. The proposed rule is currently in a 45-day public comment period.
Craft beer declines (SAM)
Off-premise craft beer sales have declined 5.1% through the first three quarters of 2022, but in Q3 trends improved to a 1.7% decline. National craft brands grew 2.5% while local craft fell 7.6% and regional craft fell 6.6%. Craft SKU counts have decreased by 2 to 3% in Q3 as FMBs have gained. Cans now represent 65% of craft dollar share, up 20% points from 2019. Craft can sales have increased by 2% through Q3 while bottle sales have decreased by 16%. Single serve 19.2-ounce cans have gained 1.8 share points to reach 4.7% of craft dollar sales. IPA sales decreased by 6.1%, but gained 1.8% share and command 45.7% of craft dollar sales. Craft beer sales in the grocery channel have decreased by 4.5% while the convenience store channel has decreased by 2.8%. With the difficult comparisons at retail, craft beer was counting on a rebound in the on-premise channel for growth, but trends have been challenged by higher prices.
