Why go public amid a raging pandemic? Albertsons CEO explains

Why go public amid a raging pandemic? Albertsons CEO explains

Grocery giant Albertsons had big plans to go public in 2015, in what would have marked one of the year’s biggest IPOs. But the grocery giant backed out of its plans, put off by a turbulent retail sector.

Today, as Albertsons and its competitors navigate a global pandemic, the 2015 retail landscape looks tame by comparison. “We are operating in industry that is transforming so rapidly,” says CEO Vivek Sankaran, who joined the company in April 2019 from PepsiCo.

But this time around, the uncertainty and tumult didn’t stop Albertsons from debuting on Friday on the New York Stock Exchange under the ticker ACI. The IPO ended up being relatively disappointing for the retailer: The company priced its shares at $16, below the $18 to $20 range it had previously been seeking. (The company’s shares closed at $15.45, down nearly 3.5%.) The second-largest grocery chain in the U.S. behind Kroger is backed by private equity firm Cerberus, which invested in 2006 and has been looking to exit.

In the last few months, Sankaran has overseen an explosion of the company’s online business as consumers radically change the way they shop. In April, for example, the company reported that its e-commerce sales that month were up 374% over the previous year.

Fortune spoke with Sankaran about Albertson’s IPO and how COVID-19 has impacted the company, which runs more than 2,000 stores under its eponymous brand as well as the likes of Vons, Jewel-Osco, Acme, and Safeway. The following conversation has been edited for length and clarity:

Fortune: The company initially announced its intention to go public in 2015. Why the delay, and why move forward now? 

Sankaran: It didn’t work out in 2015. At that time, we brought Albertsons and Safeway together, so the company has spent the last several years getting that integration right, and modernizing the company—putting technology in every aspect of it. There’s been a lot of work to strengthen the company and to get everything right from the governance aspects so we’re ready to be a public company. We felt we were ready from a business and performance standpoint. And surprisingly after a few turbulent weeks, the markets seem to be ready.

You ended up pricing below your target range. What happened?

It’s so difficult to predict what’s happening in the stock market. There’s so much volatility. Some of our investors have been with us for 15 years, so we’ve got to monetize some of that. And we are long-term oriented. We want investors to stay with us for that kind of duration to create value.

How has COVID-19 changed your strategy? 

COVID has accelerated our strategy. We pride ourselves on our fresh assortment—our meat and seafood, all of the prepared foods we have behind the counter, the depth and variety of what we provide in our stores. That was always the case. When you’re cooking at home that becomes even more important. You open your refrigerator five days after you went to the grocery store, you want that cucumber to be firm and that’s the advantage we have. Our e-commerce business is growing rapidly. We have so much more headroom there.

What is the role of the physical store going forward? 

Your question may come from this notion that everyone is going to buy online, and you may not need a store. I don’t think that’s a reality. It’s not a reality in countries where online has been around for a long time that have even higher density than America.

Also, recognize that a store, at the end of the day, is just another point of inventory. There’s service, there’s ambiance. But it’s also good inventory close to your home for us to bring it to you, or for you to pick it up. So we’re using our stores as a nice foundation for the omnichannel business.

What have been the hurdles with e-commerce?

It’s in the early stages of its evolution—not only for us, but for the industry as a whole. We’re all trying to learn how to meet customer expectations, frankly how to change customers’ expectations. It’s such a dynamic environment, and I think that’s what you have to accept if you want to be in the e-commerce business. You’re always piloting, always trying new things and investing behind it. It’s a big part of our growth agenda. The piece that’s been the most gratifying and somewhat surprising is the amount of new business when you open up e-commerce. 

How have customers been shopping differently? What do you view as permanent and what’s just a blip? 

Nothing is ever permanent. That’s a dangerous mindset to get into. They’re all coming to the stores less often but buying more when they come to the store. There are two things driving that one. One is safety, or the perception of safety. And the second, is they’re cooking more at home. They’re buying a lot more fresh, baking more at home. More cookies at home, they’re drinking more at home.

People, I think, are enjoying the time they have at home with families. I think some of that will stick. People are rediscovering that, by the way, we can get a lot of work done without having to commute two ways and spend those hours. As these things stick, at-home consumption sticks. It’s hard for me to imagine that all of this just goes away and people jump back to restaurants and their old way of life in an instant.

Are people stocking up to the same extent? Do you view that as an indicator of where we are in terms of a recovery? 

People stocking up was more in the months of March and April. We’re starting to see a lot more steadiness. People are engaging more in produce and fresh products, and the supply chains have come along nicely to support that.

What’s been the biggest challenge in making sure your employees are safe? 

It’s my No. 1 priority. I spend time on that every day, on keeping our associates and customers safe, and being there for our communities. We are always learning and innovating on how to keep people most safe.

In the early days, we couldn’t get sanitizer. One of our colleagues ended up getting sanitizer in bulk drums and we converted one of our beverage plants to get it into bottles to get it to our stores. Now those things are stabilized. It’s not so much a supply problem. At this point, my message to people is: You start thinking you can relax, but you simply cannot relax when it comes to COVID. 

Where are we in terms of recovery? 

It’s really unfortunate to see cases spiking up again in this country. I don’t think we’re anywhere at a place where we can declare victory or let alone seeing a path to victory over the virus. That’s how I see it.

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U.S. demand for TV saw a significant drop as George Floyd protests began

U.S. demand for TV saw a significant drop as George Floyd protests began

As protests spread across the United States in the wake of the police killing of George Floyd, despite the coronavirus pandemic’s continued presence, national demand for television declined.

Total demand in the U.S. for all television series dropped nearly 18% during the period of May 15 to June 4, with a sharp drop occurring between May 31 and June 4—days after Floyd’s death on May 25—data research firm Parrot Analytics found. Total demand during May 15 to May 24, which the firm measured across all streaming and linear TV platforms using piracy consumption data, social media popularity, and other measures, remained relatively stable.

Parrot Analytics

“In the days following George Floyd’s killing, as protests against systemic racism and police brutality spread across the U.S., audiences’ attention was drawn away from their usual content consumption,” said Karina Dixon, director of global insights for Parrot Analytics. “Normally market level and global demand is relatively stable. A 17.8% drop in total U.S. demand over a three-week period shows just how much this tragedy has captured the American public’s attention.”

In the same period from May 15 to June 4, the demand for TV worldwide saw a nearly 8% drop. Parrot attributes this trend to protests expanding across the globe—including in London, Seoul, Sydney, and dozens of other major international cities—as well as the opening up of more countries and states following strict coronavirus lockdown measures.

Parrot Analytics

Despite the decrease in demand for overall television content, certain shows addressing socially relevant topics saw a huge surge in interest as the protests were beginning. U.S. demand for Netflix series Dear White People and When They See Us grew 329% and 147%, respectively, during the week of May 27 to June 2, the firm found.

That interest is also reflected across other mediums as Americans grapple with issues of race and police brutality. The books How to Be an Antiracist, White Fragility, and So You Want to Talk About Race all remain in Amazon’s top 10 bestsellers list after previously selling out of stock. In the podcast space, race-oriented podcasts 1619 by the New York Times and Code Switch by NPR rank in the top 10 most popular shows on Apple’s podcast app.

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It’s no fluke how BTS fans raised $1 million in 24 hours

It’s no fluke how BTS fans raised $1 million in 24 hours

Never underestimate the stans.

In about a day, fans of the South Korean music group BTS, known as Army, have matched the group’s donation of $1 million to various charities supporting racial justice. 

On Saturday night, BTS revealed their donation to Variety, which appears to be one of the largest celebrity checks written thus far to the U.S. Black Lives Matter movement. On Sunday night, Army (which stylizes its name in all caps) followed up by pitching in more than $1 million. At the time of this article’s publication, the total reads $1.2 million—and it’s still rising.

Using hashtags #MatchAMillion and #MatchTheMillion, the fan-led fundraiser was spontaneously organized through social media after Army learned of BTS’s donation, with no direction from the music group itself. One in an Army, a charity program within the community with a history of running fundraising campaigns, served as central command.

“We’ve run big projects before, but the amount of support for this project is overwhelming,” a program spokesperson stated in a press release. “We’re so proud that Army have once again channeled their power for good and are making a real impact in the fight against anti-black racism.”

Their success may come as a surprise to some, but to those familiar with BTS’s fan organizations, it’s anything but—the groups were able to move quickly because the structures and practices for this scale of collective action have long been in place. Army has been known to rally to trend hashtags to promote new work from the group and stream music videos in concentrated sessions to rack up views. A foundation of dedicated Twitter accounts announce hashtags, monitor and report statistics, and disseminate information. 

A 24-hour deadline carries unusual distinction among BTS fans as a benchmark for achievement. It has proved effective: The group’s hit single “Boy With Luv” holds the world record for the most viewed YouTube video in 24 hours, the fandom holds the record for the most tweets under a single hashtag in 24 hours, and the group itself holds the record for most No. 1 chart spots held by a Korean album in 24 hours.

So the BTS fandom is used to mobilizing with hairpin agility. Consider the following example from last night: Less than an hour away from reaching $1 million, fans were discussing the hashtag they should use to celebrate their success. At first, they circulated #ArmyMatchedAMillion. But then a few fans suggested #2MforBLM “to make it not about us and show priority for the cause,” as one wrote. Within minutes (and thanks to myriad retweets) most of the community knew of the change of plans—and minutes later, when the $1 million goal was hit, #2MforBLM began trending worldwide.

A charitable ethos has been in place, too. A week before BTS’s donation was revealed, One in an Army had set up a channel for fans to split donations between organizations for racial justice—the group’s donation only galvanized its use. Over the past few years, fans have donated toward causes around the world, addressing such problems as environmental degradation, homelessness, and pediatric cancer; they have also adopted a zoo of animals such as whales, koalas, and Hoseok the deer, a creature in Germany christened after group member J-Hope.

The #MatchAMillion campaign now has a permanent page on One in an Army’s website. “Black Lives Matter isn’t something that has a time limit,” said the One in an Army spokesperson. A powerful grass-roots organization doesn’t, either.

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