Dive Brief:
- Albertsons is turning to technology as part of a three-year plan to cut $1.5 billion in costs in the wake of its failed merger with Kroger, CEO Vivek Sankaran said during an earnings call Wednesday.
- The grocer credits AI adoption with improving employee and customer experience, driving sales and enhancing productivity.
- Albertsons saw net sales and other revenue tick up 1.2% year-over-year in Q3 2024, which ended Nov. 30, 2024. The company sued Kroger in December, alleging the failed merger placed it at a “competitive disadvantage” in the fast-moving industry.
Dive Insight:
Food retailers of all sizes explored AI last year, targeting use cases across the business, from improving product forecasting to updating existing systems or minimizing food waste.
Family Dollar tapped Dunnhumby for AI-powered category management and merchandising collaboration solutions in September 2024. Target rolled out a generative AI tool to employees to help resolve on-the-job challenges. Fresh Thyme added AI to improve inventory management in its deli and prepared food departments in October 2024.
For most businesses, implementing AI has come after a sustained focus on technology. Albertsons previously worked to migrate workloads to cloud, launch digitized platforms and develop end-to-end capabilities, according to Sankaran.
“Our north star has been to use technology in everything we do,” Sankaran said. “Over the last few years, we have invested strategically to make technology the key enabler of all major future growth and productivity initiatives.”
After adopting AI internally, analysts expect grocers to bring AI technologies closer to consumers this year. To do so, food retailers will need to sharpen their data management capabilities, a pending matter for businesses across most other industries.
