Rapid food price deflation led to flat identical-store sales gains in the fiscal second quarter for Albertsons Cos., the retailer said in a filing Wednesday.
The Boise, Idaho-based company published the financial details for the first 28 weeks of its fiscal year (a 16-week first quarter and 12-week second quarter ended Sept. 10) as part of an update to its stock registration statement for a planned initial public offering.
For the two-quarter period, Albertsons reported sales of $32.2 billion, and a $371.7 million loss. Sales were up by 2.5% from the same 28-week period a year ago, and gross profit of 27.5% of sales was up from 27% in the same period last year, although Albertsons' net loss accelerated from $323 million, due mainly to higher interest expenses.
Identical-store sales for the period improved by 0.1% at both of its AB Acquisition and Safeway divisions, falling sequentially from 2.9% and 3.9%, respectively, in the first quarter, roughly when the retailer's falling input prices reached the shelf level.
"An increasingly competitive industry and deflation in the prices of certain foods have made it difficult for food retailers to achieve positive identical store sales growth on a consistent basis," the company said in the filing. "We and our competitors have attempted to maintain or grow our and their respective share of retail food sales through capital and price investment, increased promotional activity and new store growth, creating a more difficult environment to consistently increase year-over-year sales."
Albertsons has been awaiting a market for its stock to trade publicly for more than a year. As it previously said its owners, an investor consortium led by Cerberus Capital, were seeking to sell 65.3 million shares at a price of $23 to $26 per share. The offering would raise proceeds to pay down debts incurred by the purchase of Safeway.