Supermarket conglomerate Supervalu plans to open 160 new Save-A-Lot discount grocery stores by March 2012. The company sees significant expansion potential in the brand, which caters to households with annual incomes of $45,000 or less and serves densely populated urban markets as well as rural communities, says president and CEO Craig Herkert.
Supervalu has opened 92 new Save-A-Lot stores in the past year, the most in the brand’s history. Approximately 50 percent of those stores are licensed to independent owner-operators, demonstrating an ownership model that Herkert says is unique in the discount grocery format and serves as a strong point of competitive differentiation.
Supervalu will spend between $700 and $750 million to open the new stores and renovate some existing locations, and will be looking particularly to Western states for new markets, he said. “We are also aggressively targeting food deserts, where there is a strong unmet need,” he said on the company’s earnings call.
For its fiscal year ended Feb. 28, Supervalu posted net sales of $37.5 billion and a net loss of $1.51 billion, compared to net sales of $40.6 billion and net earnings of $393 million in fiscal 2010. The decline in earnings was due in part to store closures and the sale of a logistics division that occurred in 2010, the company said. It closed about 80 underperforming stores during the period. Same-store sales fell 6 percent in 2011 and Supervalu expects them to range from negative 2.5 percent to negative 1.5 percent in 2012.
Supervalu operates 4,294 stores, including 1,114 traditional grocery stores including the Albertson’s banner; 1,280 discount Save-A-Lot stores of which 899 are operated by licensee owners; and 1,900 independent stores serviced primarily by the company's traditional food distribution business.
Compiled by the staff of Shopping Centers Today. © April 15, 2011 International Council of Shopping Centers.
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