Laying the groundwork for more consistent performance, Supervalu Inc. outlined its growth strategy at its annual investor meeting.


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Retail News Breaks

Growth plan laid out at Supervalu investor meeting

May 4th, 2011

MINNEAPOLIS – Laying the groundwork for more consistent performance, Supervalu Inc. outlined its growth strategy at its annual investor meeting.

The plan unveiled Tuesday is aimed at making the company's traditional supermarkets more competitive as well as growing its Save-A-Lot limited-assortment discount supermarkets and independent grocery business.

"We are focused on acting as one company, working toward a common goal of delivering increased value to all of our customers and meeting their needs neighborhood by neighborhood," Craig Herkert, president and chief executive officer of Supervalu, said in a statement.

For its traditional supermarkets, Supervalu plans a "fair everyday pricing" plus promotion strategy to sharpen its value proposition along with store assortments and formats that are better matched to local needs. Inside stores, enhanced fresh offerings will include more locally grown produce, a new program dubbed "Just Baked" to make fresh-baked bread and rolls available throughout the day, and improved deli department offerings with new items such as grilled chicken.

Another linchpin of the growth plan will be a more compelling private label program. Supervalu said a new single, national brand-equivalent private label, called Essential Everyday, will replace the current banner-branded products. Essential Everyday will be rolled out in phases, and the company noted that the brand will bring "significant savings" through packaging and a more national approach to advertising and promotions. Also, the Shoppers Value entry-price brand will be launching or relaunching 80 items in the coming months.

Herkert said the company aims to deliver a 100-basis-point annual improvement in private-label sales per year over the next three years.

Save-A-Lot also is a pillar of Supervalu's growth strategy. Plans call for the retailer to open 160 new Save-A-Lots in fiscal 2012 and to more than double the chain's size to over 2,400 stores by the end of 2015.

According to Supervalu, the Save-A-Lot chain encompasses 30% corporate-owned and 70% licensee-operated stores, a model supports the company's growth strategy and helps it conserve capital.

Private label also is being expanded at Save-A-Lot. At the meeting, Supervalu announced the addition of Save-A-Lot Today, a new value-priced brand offering most products for under $1.

On the wholesale side, Supervalu said it plans to grow its grocery distribution business through continued development and deployment of new value-added services to support its independent retailers while better leveraging the scale of its entire store network. The company also is seeking new affiliations and expand its geographic reach into previously underserved markets. For example, it recently affiliated with C&K Grocers, a 62-store grocery retailer in northern California and Oregon.

Overall, Supervalu's retail network includes 4,294 stores, including 1,114 traditional supermarkets (805 with pharmacies), 1,280 hard-discount stores (899 operated by licensee owners) and 1,900 independent stores serviced mainly by the company's food distribution business.

 

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