Albertsons announced Thursday that it is lowering its full-year sales and earnings forecasts, as the grocery industry continues to feel the strain of cautious consumer spending driven by persistently high food and gas prices. The news sent the company’s stock tumbling 20% in premarket trading.
Although Albertsons reported stability in its digital and pharmacy divisions, CEO Susan Morris acknowledged in a statement that “core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer.”
Ongoing inflation and elevated prices at the pump and in the grocery aisle have pushed many households to become more selective about where and how they spend their money, with many turning to lower-cost stores and store-brand products.
That shift has worked in favor of mass retailers like Walmart and discount and private-label grocers like Aldi, while chains like Albertsons have seen sales suffer as middle- and lower-income shoppers continue to seek out cheaper alternatives.
Albertsons now projects identical sales to fall between 0.5% and 1.5% for the year, a significant pullback from its previous guidance of flat to 1% growth.
On the earnings side, the company now expects adjusted earnings per share to land between $1.75 and $1.85, well below its earlier forecast of $2.22 to $2.32.
