CEO Expects Supervalu to Grow-A-Lot
As a former executive with Wal-Mart Stores,
Supervalu CEO Craig Herkert knows what low prices and a tightly-controlled
selection of top movers in food categories can do for a retailer’s sales.
So, there shouldn’t be much surprise that Mr. Herkert’s plans to turn Supervalu
into “America’s neighborhood grocer” include a rapid expansion of the
company’s limited assortment Save-A-Lot format.
Mr. Herkert is looking to
double the number of Save-A-Lot stores over the next five years from its
current count of 1,200. The company is slashing its dividend to help pay
for the expansion and it has plans in place to make it easier for licensees
to open and operate stores.
“This is not an abandonment of traditional
grocery; this is an acceleration of Save-A-Lot,” Mr. Herkert told analysts
during Supervalu’s second-quarter earnings call.
While Save-A-Lot is a big
part of Mr. Herkert’s answer to Supervalu’s recent woes (company earnings
were down 42 percent in the most recent quarter versus the same period in
2008), he also sees the need for the company’s other chains to become more
price competitive especially in everyday retail.
Questions: What do you think of Craig Herkert’s plans for growing Supervalu?
Do you see the greatest opportunity for growth with Save-A-Lot or some
other part of Supervalu’s business? What about its role as a wholesaler?
- Supervalu Reports Second Quarter Fiscal 2010 Earnings – Supervalu Inc./Business
- Q2 2010 Supervalu Inc. Earnings Conference Call – Supervalu
CEO Craig Herkert stocks a vision – Minneapolis
to Double Number of Discount Stores – The
Wall Street Journal