by Terrie Ellerbee/associate editor
In his first earnings call since being named president and CEO of Supervalu, Sam Duncan said he’s spent a lot of time listening.
Open dialogue, he said, “will produce tangible results for all of us.”
The “new” Supervalu is now comprised of three segments: distribution for independent grocers, Save-A-Lot and corporate retail stores.
Duncan, new Chairman Bob Miller and the independent business team have hosted get-togethers at recent National Grocers Association meetings. They stayed late into the night at one of them, listening “until everyone’s thoughts had been heard,” Duncan said. He wanted to assure them that he is personally committed to their success.
“It was important to understand their perspective on the company, and more specifically, where they felt we could do a better job in meeting their needs,” Duncan said.
Duncan also hosted a town hall meeting in St. Louis for Save-A-Lot licensees representing more than 400 stores.
“I wanted to hear directly from them—what Save-A-Lot could do to make them more competitive, what Save-A-Lot does well and where the opportunities lie—to be frank and blunt with me, so we can improve the Save-A-Lot model,” Duncan said. “Their concerns were honest, sincere and with merit, and it became apparent that we had largely lost our way and we are no longer true to what the hard discount format should be.”
The dialogue with retailers has just begun. Supervalu has put in place a national retail advisory group that will hold its first meeting in June.
“The group will be composed of retailers ranging in size from large to small, single-store retailers up to some of our largest multi-store groups,” Duncan said. “This will be a forum dedicated to hearing from and interacting with a broad range of business people who share common concerns and objectives.”
He said having it on a national scale is “an exciting first.”
The company’s corporate stores—under the regional Jewel, Cub, Farm Fresh, Shoppers, Shop ‘n Save and Hornbachers banners—are going to become more independent. Supervalu is decentralizing operations, Duncan said, and will allow banner teams to make merchandising, marketing and operating decisions.
The retail banner teams have been given 30-, 60-, 90- and 180-day roadmaps that include guidelines around pricing.
“We need to make sure that we are priced right on the top 50 items in each of our markets, and that our overall pricing is aligned with our broader go-to-market strategy,” he said.
Also, a broader set of standards around fresh merchandise will be implemented to help the retail banners differentiate themselves in that area.
In addition, the retail teams also will focus on managing costs.
As the retail organization moves toward decentralization, it was apparent that the corporate staff needed a “significant overhaul,” he said.
Supervalu has “a solid asset base and great potential. Having three distinct segments contained within the same organization provides a unique compelling business proposition,” Duncan said.