Supervalu unveils growth plans for the future

by Bryan Salvage
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CHICAGO – Supervalu Inc.’s senior management team provided an update on its strategic plan to deliver profitable growth in the future for shareholders during a May 3 meeting with investors. The company’s plan supports its vision to become America’s Neighborhood Grocer and is focused on improving the competitive performance at the company’s traditional retail grocery stores, and on growing its Save-A-Lot and independent retail businesses.

The company’s senior management team outlined key initiatives the company is undertaking to reverse sales declines at its traditional retail banners and get them back on the path to growth. Initiatives include:

  • Sharpening the traditional retail banners’ value proposition through a fair everyday pricing plus promotion strategy.
  • Improving deli department offerings with new products like grilled chicken.
  • Developing and maintaining a portfolio of private-brand products that differentiate its retail outlets from the company’s competition and provide more competitive value for customers.
  • Better matching store assortment and format to the needs of each neighborhood.
  • Providing a more hassle-free experience both in-store and online.

Over the next three years, the company expects to deliver a 100 basis point annual improvement in private-brand sales per year, said Craig Herkert, CEO and president. It intends to move to a new single national-brand-equivalent private-brand — Essential Everyday — to replace existing banner-branded products. By introducing the Essential Everyday brand, which will roll-out in phases, the company will be able to realize significant savings through packaging and take a more national approach to advertising and promotions, it said.

Supervalu also plans to expand its Shoppers Value entry price-point private-brand line and will be launching or re-launching 80 new items in the coming months.

The company discussed plans to continue to aggressively support the national expansion of Save-A-Lot, its hard-discount format. Plans include growing Save-A-Lot by 160 new stores in fiscal 2012, keeping the company on track to reach its goal of building a network of more than 2,400 stores by 2015.

Supervalu plans to add its new Save-A-Lot Today brand to its private-brand program. This new brand is an opening price point line with most products priced under $1 to help its value-focused customers.

Plans to grow its wholesale distribution business through continued development and deployment of new value-added services to support its independent retailers, while at the same time better leveraging the scale of the entire Supervalu store network, were also outlined. The company is still looking for new affiliations to expand its geographic reach into previously underserved markets. Its recently announced affiliation with C&K Grocers, a 62-store grocery retailer in northern California and Oregon, is one example of the success of this strategy, the company said.

Supervalu Inc. is one of the largest companies in the US grocery channel with annual sales of approximately $38 billion. It serves customers throughout the US through a network of approximately 4,294 stores composed of 1,114 traditional retail stores.

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