Albertsons, the second largest grocery chain in America, says they’re aggressively rolling out home delivery programs throughout the U.S., to better compete with Amazon (NASDAQ:AMZN) after the e-commerce giant announced plans to buy health-food chain Whole Foods (NASDAQ:WFM) for $13.7 billion in June.
“At the end of this fiscal year, we'll be in eight of the 10 biggest markets in the U.S. We're going to spend lots of money on home delivery. A place like Chicago, we're number-one share in the supermarket sector. ... We're going to work hard on home delivery, even though Amazon is, too, and lots of other people. We think we can compete in that space, because somebody can order the complete variety from our store. And we have countertop service,” Alberstons CEO Bob Miller told The Idaho Statesman.
Miller said the chain is planning to offer more "click-and-collect" type services, where consumers can order online and then pick it up later at a specific time.
And it’s not just Amazon posing a threat to the Idaho-based retailer. Aldi, a German-based grocery chain, announced in June that it would invest $3.4 billion to expand its U.S. store base to 2,500 in five years.
“There's no end to new competitors. There's no end to people closing and going away, too. ... I think it's the normal course in our business,” Miller said.
However, Miller does believe that Amazon is going to make Whole Foods "better" because the chain needs a lot of work.
“They've been sinking like a rock. They need some help. We'll see if Amazon can help them. But it just heightens the competitive environment,” Miller added. “But I think they're [Amazon is] after that last mile where they can [land] the customer, and we are, too.”
Albertsons says in addition to home delivery, they are also aggressively remodeling their 2,200 stores around the country, and planning to build 18 new locations this year, spending more than $1.4 billion this year in capital.