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Albertsons CEO Tells Jim Cramer COVID Fueled Change

Vivek Sankaran says pandemic increased sales and customer loyalty, and describes how Albertsons is managing inflation concerns.

The pandemic increased sales and created stronger customers for grocery chain Albertsons Co.s  (ACI) - Get Albertsons Cos. Inc. Report, with shares reaching new highs, up 14% so far this year, Vivek Sankaran, president and CEO, told Jim Cramer during a recent "Executive Decision" interview on Mad Money.

Sankaran said the pandemic only accelerated changes Albertsons was already making at stores, including offering better varieties of products and more private label items. The company then accelerated pickup and delivery options, which increased 200% during the year, and was able to engage more shoppers with loyalty programs.

Sankaran noted that the pandemic changed the way customers experience shopping. Throughout the pandemic people stayed home and cooked more, he said, which led to an increase in buying fresh produce, a step up to quality meats, and increased spending on discretionary items like flowers.

Turning to the topic of inflation, Sankaran said they are seeing 3% to 4% price inflation, but so far, they've been able to offset those increases with productivity gains. There are still some shortages in some locations, he added, but for the most part, supply chains have adjusted to the new levels of demand.

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Cramer breaks down why the current inflation environment isn't a bad thing for grocery chains like Kroger  (KR) - Get Kroger Co. (KR) Report. "A little bit of inflation is a good thing for some companies," Cramer said.

Cramer wrote in his Real Money column recently that "the most important thing we heard [from the FOMC] is that the Fed thinks that the things that are causing inflation could slow down and that he would rather wait and see. Read more about Cramer's stand on inflation, the Federal Reserve and the stock market opportunities on Real Money.

Cramer added: “I think [Jay] Powell believes that it is possible that we could have more people hired, that we could have lower unemployment among Hispanics and African Americans, that we could have spending be strong, but not causing too much inflation. I think Powell believes that we can have some cake and do some eating and that's great. He doesn't want to ban the cake and he doesn't want to let us get obese,” Cramer wrote.