Editor's note: Gene Hoffman was chairman and president of Supervalu Wholesale Foods Companies for a decade, following his tenure as president of The Kroger Co. Mr. Hoffman looks back to that era as the company's "halcyon days." He writes, "Jack Crocker was our insightful and inspirational leader back then and I was head of all operations save for its two low impact subs back then, Shopko and County Seat."
Supervalu, which once had a laser-like focus on its business model with a "total commitment to serving customers more effectively than anyone else could serve them" seems unsure of what it is today. Is its current strategy to be one of the largest and most successful wide assortment supermarket chains or to be one of the largest limited assortment store chains, or both?
In the mid-70s to the mid-80s, Supervalu was America's largest food wholesaler, a multi-billion dollar corporation and the envy of the food industry. Its sales tripled and net profits compounded at 20 percent annually, resulting in three stock splits. Today, Supervalu is a much larger, more diversified, debt-burdened, low-achieving conglomerate -- a food wholesaler, operator of numerous regional supermarket chains and an expanding limited assortment chain, Save-A-Lot.
At an investor event on May 3rd, after two years under the leadership of its current CEO, Craig Herkert, Supervalu detailed its strategic plan to deliver profitable growth in the future for shareholders. It also put out a press release that reads like Retailing 101.
It would have to "improve sales growth at the company's traditional retail banners," Supervalu said. It would also need to "improve promotion of our value pricing, enhance such fresh offerings as locally grown produce, develop and maintain a compelling collection of private brands, adjust store assortments and format based on the needs of each neighborhood, and improve the customer experience in stores and online."
In addition, the release stated that one of Supervalu's long-term goals is the natural expansion of its Save-A-Lot banner and that it intends to grow by 160 new stores in fiscal 2012, keeping the company on track to have 2,400 stores by 2015. Thus, while struggling for sales and to retain share of market, Supervalu's intent still seems to be to follow a multi-front growth strategy.