Home » Supervalu 4Q Sales Slip Nearly 6 Percent

Supervalu 4Q Sales Slip Nearly 6 Percent

Last updated on June 13th, 2024 at 12:09 pm

Company lost $1.5B in FY11

Supervalu Inc. continues to “rightsize” itself, but reported a slip in net sales and negative 5 percent same-store sales in the fourth quarter.

Net sales in the fourth quarter of fiscal 2011 were $8.7 billion vs. $9.2 billion in the same period a year ago. Fourth quarter net earnings were $95 million compared with $97 million last year.

Craig Herkert, CEO and president of Supervalu, said that Northeast banners are weighing down identical stores sales. Without them, same-store sales would have been negative 3.5 percent.

Chicago stores came in below the corporate average while the company’s Save-A-Lot banner showed flat same-store sales.

“While our IDs were unchanged from Q3, they remain disappointing and are clearly not what we had anticipated they would be when we started the year,” Herkert said. “Addressing this erosion in our top line is the highest priority for me and my management team. Until we reverse this negative trend, we will not be able to take full advantage of our lower cost structure or capitalize in the many positive operational changes under way at Supervalu.”

For fiscal year 2011 Supervalu saw full year net sales of $37.5 billion and a net loss of $1.51 billion vs. net sales of $40.6 billion and net earnings of $393 million in fiscal year 2010.

Herkert said that fiscal year 2012 would be “a year of transition” for the company as Supervalu continues to strive to be America’s Neighborhood Grocer. He laid out “eight plays to win” the company is using as it puts its strategy into play. Two focus on growth opportunities and the other six plays have to do with traditional retail operations.

The growth plays are expanding Save-A-Lot and the wholesale business. Over the past year, the company has opened 92 net new Save-A-Lot stores, the most in the company’s history. About half are licensed to independent grocery operators.

Capital investment in fiscal 2011 totaled $604 million.

Supervalu plans to open more than 160 net new stores in fiscal 2012. Its capital plans call for spending $700 million to $750 million.

Growing the wholesale business includes adding new affiliations, such as the one recently announced with C&K Markets on the West Coast.

As for the other six of the eight plays, Herkert said Supervalu has realigned its operations to focus the corporate culture on the end consumer. Specific elements include providing high-quality fresh products, matching offerings to the neighborhood (being “hyperlocal”) and providing customers with everyday value.

Herkert said Supervalu has revamped the incentive program for its store directors and provided them with new leadership training. It also has empowered them with more control over their stores to drive the hyperlocal strategy. They now have control over 25 percent of their store endcaps, which will grow to 50 percent this summer, and they have the authority to tailor their assortments and offerings to meet the specific needs of their communities. Merchandising is aligned with the hyperlocal strategy.

Also, the company has refocused on providing a hassle-free shopping experience, meaning that all areas of the store from the bakery to the pharmacy should be ready for customers.

Another play has to do with improving capabilities so that Supervalu is a more responsive company, including the way it interacts with suppliers. The final play focuses on price investment.

Herkert said more details on the eight plays would be provided at Supervalu’s Investor Day May 3.

Supervalu expects fiscal 2012 identical store sales to be between negative 1.5 percent and negative 2.5 percent.

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Shelby Team

The Shelby Report delivers complete grocery news and supermarket insights nationwide through the distribution of five monthly regional print and digital editions. Serving the retail food trade since 1967, The Shelby Report is “Region Wise. Nationwide.”

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