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January 11, 2022 10:45 AM, EST

Albertsons Struggles With Rising Labor, Logistics Costs

Albertsons store Bridget Bennett/Bloomberg

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Albertsons Cos. is wrestling with higher labor and logistics costs as it seeks to cash in on surging sales.

Wage increases and additional hiring tied to increased sales of fresh products pushed up employee costs, Albertsons said in a statement Jan. 11 as it reported earnings for the period ended Dec. 4. Higher prices charged to consumers and incremental sales from administering COVID-19 vaccines helped boost revenue in the quarter. Still, inflation weighed on profitability. Albertsons’ gross margin was little changed relative to a year earlier after excluding the impact of fuel price swings.

The results underscore the challenges facing supermarkets as cost increases threaten to outlast a pandemic-era shift to more home-cooked meals. Albertsons also said it logged higher supply chain costs, echoing comments from other retailers Jan. 11 including Urban Outfitters Inc. and American Eagle Outfitters Inc.

Albertsons raised its full-year profit outlook to as much as $2.95 a share, compared with a previous forecast of no more than $2.60. Analysts had expected $2.64.

The shares fell 6% to $29.93 at 9:45 a.m. in New York. Albertsons advanced 92% during the 12 months ending Jan. 10, the biggest gain on a Russell 1000 index of consumer staples companies.

Albertsons Cos. ranks No. 4 on the Transport Topics list of top grocery carriers in North America.

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