Albertsons' store portfolio is growing rapidly and becoming increasingly diversified.
Maybe that’s why Jim Donald was named President and Chief Operating Officer of Albertsons not long ago. His experience seems broad enough to manage a company that operates supermarkets under 20 different banners.
But more than that, Albertsons plans to acquire about 2,600 Rite Aid drug stores. That will make it the operator of about 4,900 stores in all. It will also seek to become publicly traded.
The newly appointed Donald is a well-known executive with varied experience in managing a wide range of food and nonfood enterprises.
Most recently, Donald was CEO of Extended Stay America, a sizable lodging chain. He left there in 2015 after a three-year stint. Prior to that he was for two years President and CEO of Haggen, a food and pharmacy retailer.
Perhaps he’s best known for his six-year tenure heading Starbucks, first as President and CEO of North America, then of the entire company. He left that post in 2008.
Earlier in his career, Donald held executive positions at Pathmark, Albertsons, Safeway and Walmart.
The most pressing task on Donald’s plate will be to oversee the integration of Rite Aid into Albertsons. That will be a big job, but maybe the way will be eased since Donald was on Rite Aid’s board from 2008 to 2013.
The Rite Aid acquisition should provide Albertsons with ample opportunities for sales growth. Rite Aid pharmacies and its RediCare walk-in clinics can be added to supermarkets, Those units will increase store traffic.
Beyond that, Albertsons can add its own brands to the grocery departments of stand-alone Rite Aid stores. Product-distribution efficiencies should be easy to obtain.
Albertsons' acquisition of Rite Aid stores represents a major foray into the rapidly consolidating healthcare business.
The Rite Aid stores Albertsons will get are among those Walgreens sought when it attempted to acquire the entirety of Rite Aid. Walgreens abandoned that after pushback from the FTC. Still, Walgreens will end up with more than 2,000 Rite Aid stores.
The new interest in healthcare comes at a time when there will soon be many more uninsured people than there are now. Some will seek inexpensive options to costly prescription drugs, doctor visits, emergency rooms and hospitalization.
With all it plans, Albertsons should be well positioned to continue as one of the biggest food retailers in the nation, and to become perhaps a major force in healthcare.
For PLMA Live, this is David Merrefield.