Convenience makes for a compelling tug on the consumer wallet, and that seems to be what Albertsons (NYSE:ABS) has in mind as it launches a pilot program with Office Depot (NYSE:ODP), which was announced Tuesday. Through this program, 18 of Albertson's stores in the Chicago, Phoenix, and Los Angeles markets will peddle office and school supplies provided by the office-supply heavyweight.
Success depends on whether consumers will look for office supplies in their grocery stores. But given our fixation on "faster, cheaper, easier," it's hard to believe this won't gain some traction for Albertsons. How often have you wished for more convenience in your life? Who wants to drive to multiple stores to buy groceries, pet food, office supplies, and take care of the rest of the countless errands that burn into our leisure time?
Grocery stores have long counted on the appeal of convenience, but only recently have they gotten innovative with non-traditional fare. With increasingly busy lives and suburban sprawl, the ability to fill prescriptions, pick up a greeting card, or buy a dozen flowers while grocery shopping has been a tried and true strategy, but many grocers have pretty stale goods in some other areas, like those dumpy "stationery" sections with nothing but standard Bic pens and those black-and-white journals we all remember from our school days.
However, changing commuting trends and suburban congestion, matched with the changing parameters of home sweet home -- which now often contains at least one PC if not an entire home office -- make it perfectly clear why any number of scribbled grocery lists nationwide might read: "Bread, eggs, ink jet printer cartridge, pet food, portfolio folders, coffee, copy paper, cheese, envelopes..."
Of course, Wal-Mart (NYSE:WMT) has long since figured out the lure of one-stop shopping, with its wide range of discount products that run the gamut from fabric softener to vacuum cleaners to bedding to electronics to videos. And of course, in many of its supercenters, it provides groceries.
As Albertsons makes this move, it will be interesting to see how its main competitors react and what actions they will take to broaden their appeal. Its top rivals nationwide include Kroger (NYSE:KR) and Safeway (NYSE:SWY).
Another company to watch is Staples (NASDAQ:SPLS), a neck-and-neck rival with Office Depot. Will it enter into any deals with grocery giants eager to match Albertsons' move? Or will Wal-Mart eat them all for lunch?
Albertsons plans to announce its second-quarter earnings on Thursday.
