Supervalu, Sav-A-Lot and Private Brands

On Tuesday, Eden Prairie, Minnesota based grocery retailer and distributor Supervalu was the first of the grocers to report quarterly results, and the numbers for its fiscal third quarter were less than stellar: A loss of $202 million, or 95 cents a share, compared with a profit of $109 million, or 51 cents, in the same period a the prior year. The company, which operates Albertsons, Jewel-Osco, Acme and other chains, also cut its forecast for the year.

“This is going to be a challenging year going forward to manage inflation,” Supervalu Chief Executive Officer, President and Director Craig Herkert told analysts Tuesday. “It’s just a fact and we believe these inflationary measures are going to impact consumers.”

Despite the challenges times or perhaps because of the challenges Supervalu continues to expand its Earth City, Missouri, based Save-A-Lot banner, where Private Brands are a the star of the show, the company’s CEO told analysts in a recent conference call.

“During the quarter, we opened 41 new stores, bringing our total to 79 stores for the year, which keeps us on track to realize our goal of adding 100 new stores by the year end,” said Supervalu President and CEO Craig Herkert.

“For those who have not visited a Save-A-Lot store, I want to be clear about what this format is. Save-A-Lot is a limited assortment food store that carries about 1,800 SKUs including grocery products, fresh produce, meat, frozen foods, and dairy. Over 60 percent of our sales from this format come from private label products that are priced to save our customers up to 40 percent compared to traditional grocery retail prices. A family can do a full shop at Save-A-Lot, which is a very different experience from a convenience or a dollar-type store,” Herkert said.

Speaking of Supervalu and Private Brands more broadly, Herkert replied, “We’ve got a great private label team here, and I mentioned that since I’ve arrived we’ve grown private label penetration by over 200 basis points in our traditional banners. You will continue to see us do some really great things in private brands, both in our main tier and our value tier. As customers need to find value products, we want to be that retailer where they can find value products or branded products. There are going to be price increases, but we plan on making sure that our customers have a range of offerings on the shelf to suit her needs, depending both on where they are or what time of the month it is, and how they need to complete their shopping trip.”

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.