Albertsons is ramping up its automation at three of its 22 dedicated dedicated DCs, along with a new WMS across the company.

Albertsons, one of the largest U.S. grocery and drug retailers operating stores in 35 states, expects 30% of its distribution volume to be automated by the end of 2025, according to CEO Vivek Sankaran on a Jan. 8 earnings call.

The grocery retailer has completed implementing automation at three of the company’s 22 dedicated distribution centers (DCs), according to Sankaran, with plans of more to come this year. Albertsons also plans to roll out a new warehouse management system (WMS) across the company before 2026 for additional automation and efficiencies.

“In our supply chain, we are continuing to make significant progress on automation and the rollout of our new warehouse management system or WMS,” said Sankaran. “By the end of 2025, we expect 30% of our distribution volume to be automated and our WMS to be fully implemented company-wide. These supply chain initiatives improve in-stock conditions, differentiate our fresh quality, lower our cost to serve and improve our end-to-end data analytics capabilities.”

“And finally, in store operations, we are leveraging a more robust technology platform to drive enhanced efficiency, improved customer experience and deeper associate engagement,” Sankaran continued. “For example, we've implemented AI technologies that provide a prompt for missed scans, which is reducing inventory shrinkage and improving the customer and associate experience. We're also expanding the utilization of technology in our produce departments, which is driving increased sales, reduced inventory shrinkage, improved quality and enhanced labor productivity.”

Technology advancements, such as distribution automation, is a key driver of performance and productivity at Albertsons, according to Sankaran. The CEO also stated that Albertsons plans to deliver $1.5 billion in cost savings across the company over the next three years.

As with other grocery retailers, Albertsons is turning to automation to strengthen market share in the grocery industry. Improving productivity is a primary goal as the company seeks to compete with growing grocery footprints of national retailers like Costco, Walmart and Amazon, particularly in the wake of a failed merger with Kroger.

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