Last month, Albertsons expanded its board to create the new role of
advisor to CEO Susan Morris.
The former CEO of eBay and Hewlett-Packard, Meg Whitman, stepped into the role as the top executive at Albertsons. Previously, she also led Quibi and served as the U.S. ambassador to Kenya.
Beyond her efforts to rebuild Albertsons, it appears that Whitman also
looks to restructure and save its retail media ad business.
Whitman has extensive expertise with running and innovating in supply chains, logistics, online marketplace, and advertising
for all companies of all sizes.
During the earnings call, Whitman said, "I joined Albertsons because I believe the company has greater potential than its results have reflected."
Albertsons plans a turnaround, and Whitman will drive it. Whitman has vast experience in advertising capabilities from her extensive Silicon Valley technology expertise, large-scale digital
transformation background, and explicit mandate to streamline operations using artificial intelligence (AI).
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The company spoke about launching
a comprehensive review of its operations during its second-quarter earnings call on Tuesday, where it reported revenue slid 0.1% vs. a year ago, to $18.89 billion, and
adjusted net income fell about 28%, to $179 million. Same-store sales fell 0.8%.
During the past several years Albertsons invested in ecommerce capabilities, loyalty, pharmacy, retail
media, own brands, and a retail media network called Albertsons Media Collective.
While Morris called them "important investments that have increased the value to our
customers," she said the company must "double down on the basics. Our stores must provide the products our customers want at prices they want to see in the places and formats they love."
There
are signs when a media business is failing. Albertsons is looking for a new CFO, and Brian Monahan, senior vice president of Albertsons Media Collective, the grocery giant’s retail media
network, left the company.
The media division now reports to Albertsons CMO Emily Turner, who is new to the company. She joined in mid-August from The Fresh Market’s, serving as CMO.
New hires and restructuring are only two examples of trouble amidst Albertsons consolidating internal operations as the company works to improve its advertising and sales performance.
The hope is to combine retail media and marketing will strengthen coordination across these organizations while enabling more rapid decision-making and creating a more
connected experience for its partners -- and to give it the ability to compete with other retail media networks.
Charles Elson, founding director of the Weinberg Center
for Corporate Governance at the University of Delaware, called the selection of Whitman as executive chair "odd.” He told
The Wall Street Journal "there’s no doubt she’s extremely talented," and added that leaders in the grocery business typically "grow up" there.
During the
earnings call, when an analyst asked Morris how long the turnaround could take, she said "we'll come back with more clarity in the fourth quarter earnings call," adding that the company is "moving
with speed, and we have strong alignment across the organization."
"We're not waiting," Morris said. "While there are deeper dives to be done in certain areas, there are clear lines of sight
on things that we can do right now to materially change the trajectory, and that's what we're focused on."
Albertsons is also seeking billions from rival grocery chain Kroger for a failed
merger -- at least $8 billion -- after their deal fell through two years ago. The company is alleging that Kroger leaders made “lowball offers” to federal regulators, largely to keep the
most profitable stores in the combined company, according to WSJ, which cited a court filing unsealed Monday.