July 23 (Reuters) – Albertsons cut its annual identical sales and profit forecasts on Thursday, as U.S. grocers navigate cautious spending by consumers struggling with higher gas and food prices, sending its shares plunging 20% in premarket trading.
While its digital and pharmacy business held steady, “core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer,” CEO Susan Morris said in a statement.
Sticky inflation, sustained higher gas and food prices have caused households to become more selective in their spending habits, opting for cheaper outlets and brands.
While these trends have benefited mass retailers such as Walmart and private label and discount grocers such as Aldi, grocers such as Albertsons have seen more pressure on sales as middle- and lower-income consumers continue to trade down.
Albertsons expects identical sales to decline in the range of 0.5% to 1.5%, compared with its prior target of flat to up 1%.
Albertsons estimated adjusted earnings per share in the range of $1.75 to $1.85, compared with its earlier target of $2.22 to $2.32.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila)
