Growth Strategies Case Study

Albertsons Incorporated’s Dilemma

OR

Abstract:

Albertsons Incorporated, America’s 2nd largest supermarket chain with more than 2500 stores and revenue of around $40 billion enjoyed a presence across 37 states of the US. It operated under various brand names including Albertson's, Acme Markets, Bristol Farms, Jewel, and Shaw's.

Albertsons faced competition from Kroger, Safeway and Wal-Mart. The supercentres of Wal-Mart, which offered products at lower prices, affected the net income of Albertsons, which fell from US $ 865 million in 2003 to US $ 556 million in 2004. In spite of the revival efforts undertaken by Albertsons, the net income further declined to US $ 474 million in 2005. CEO Larry Johnston eventually decided to sell the chain but faced dilemma whether to sell the whole or a part of it.

The case traces the origin, growth and various acquisitions undertaken by Albertsons, the second largest supermarket chain in US. The case focuses on the revival efforts carried out by Albertsons to sustain competition from Wal-Mart supercentres and ends with the dilemma faced by Larry.

Pedagogical Objectives:

• To discuss growth and competitive strategies in retail industry
• To analyse the competitive scenario created by the presence of new store formats.

Keywords : Albertsons Inc.; Supermarket industry; Joe Albertson; Larry Johnston; Kroger; Safeway; Wal-Mart; Supercentres; Acme Markets; Bristol Farms; Jewel; Kohlberg Kravis Roberts & Co.; Consumer spending; Growth Strategies Case Study; Consumer purchase behavior; automation; distribution; customer relation; acquisition; competitive strategy; price war; market share; buyout; bidders; management dilemma

Contents : 
Albertsons Incorporated
Managing Albertsons
Competitive Landscape
Major supermarket chains in US
Wal-Mart Stores USA
Albertsons Inc., Board of Directors
US Grocery purchase behavior