During a meeting with investors, SUPERVALU provided an update on its strategic plan to deliver profitable growth in the future for its shareholders. The plan, which supports the company’s vision to become America’s Neighborhood Grocer, is focused on improving the competitive performance at the company’s traditional grocery stores, and on growing its Save-A-Lot and independent retail businesses. The company is investing in and deploying new tools and capabilities to support its owned and licensed formats and the many independent grocers, which serve customers daily.
Commenting on the company’s plans, SUPERVALU CEO and president Craig Herkert said, “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.”
Traditional Retail Banners
At the meeting, 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. The efforts underway include:
- Sharpening the traditional retail banners’ value proposition through a fair everyday pricing plus promotion strategy;
- Enhancing fresh offerings, which includes providing customers with more locally grown produce, introducing a new “Just Baked” program to ensure the availability of fresh-baked breads and rolls throughout the day, and improving deli department offerings with new products like grilled chicken;
- Developing and maintaining a portfolio of compelling private brand products that differentiate our retail outlets from our competition and provide more competitive value for customers;
- Better matching store assortment and format to the needs of each neighborhood; and
- Providing a more hassle-free experience both in-store and online.
In discussing its Private Brands program, Herkert said that the company expects to deliver a 100 basis point annual improvement in private brand sales per year over the next three years. As part of its plans, the company announced that it would radically evolve its Private brand portfolio including the move to a new single national-brand-equivalent private brand — Essential Everyday — to replace existing banner-branded products. With the introduction of the Essential Everyday brand, which will roll-out in phases, the company will be able to realize significant savings through packaging and taking a more national approach to advertising and promotions.
This move comes at the same time that Delhaize owned grocers Food Lion, Hannaford, Sweetbay, Bloom, Harveys and Reids are launching their similar My Essentials Private Brand and potentially consolidating their own banner Private Brands. The similar strategy and obviously similar name may mean great minds think alike or it may herald the beginning of a new generation of generics heralded by the generic “Essentials” names. It would be nice to see Private Brand builders invest in naming and brand creation at the same level as national brands. Generic descriptive names may solve the short-term problem however they rarely if ever have the power to differentiate and create passionate loyal customers.
The company also plans to expand its Shoppers Value entry price-point Private Brand line and will be launching or relaunching 80 new items in the coming months.
At the meeting, the company discussed its plans to continue to aggressively support the national expansion of Save-A-Lot, its hard-discount format. Those 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.
The Save-A-Lot portfolio includes a blend of 30 percent corporate-owned and 70 percent licensee-operated stores. This multiple-ownership model supports the company’s aggressive growth strategy, while helping it conserve capital.
During the meeting, the company announced the addition of the Save-A-Lot Today brand to its private brand program. The new Save-A-Lot Today brand is an opening price point line with most products priced under $1 to help its value-focused customers stretch their dollars.