Supervalu Puts ‘For Sale’ Sign on Shop ‘n Save
By George Anderson
Ask Jeff Noddle what he thinks about Supervalu’s prospects and he’ll tell you that the company is “very well positioned for the long term.” It’s dealing with more immediate issues that has his attention at the moment.
Yesterday, Mr. Noddle and company announced that it would sell 20 corporately owned grocery stores operating under the Shop ‘n Save banner.
“By eliminating the split ownership of the Shop ‘n Save banner in the Pittsburgh market, Shop ‘n Save’s go-to-market strategy will be simplified,” said Supervalu’s chairman and chief executive officer. “We remain committed to our strong independent operators whose local customer knowledge and marketing savvy positions them to successfully compete and serve the Pittsburgh customer base.”
Supervalu expects that independent operators, currently running 55 Shop ‘n Save stores in the market, will buy most of the stores being put up for sale.
Jason Whitmer, an analyst with FTN Midwest Securities Corp., has expressed concern about Supervalu’s retail business, which he maintains has “been struggling the last three or four quarters.”
Mr. Noddle maintains a positive outlook, despite the challenges his company faces.
“The sales environment has weakened since the first quarter as the impact of higher fuel prices continues to unfold across the consumer spending landscape. We are working to refine our merchandising programs during this challenging environment to generate sales improvement.”
Supervalu’s chief added: “Several of our new initiatives have been launched, including W. Newell & Co. produce and our supply chain technology investments, as well as the integration of Total Logistics, Inc. which is substantially complete. We remain committed to our strategy, which includes innovative retail merchandising programs, network expansion and the delivery of best-in-class supply chain services across the grocery retail channel and beyond.”
Moderator’s Comment: From your vantage point, what has been Supervalu’s response to the challenging sales environment the company and its competitors
face? Is Supervalu on the right track or are there specific opportunities it is missing to improve sales? –
George Anderson – Moderator
- Supervalu Provides Fiscal 2006 Earnings Update – Supervalu/PRNewswire-FirstCall
warns on profits; to sell some stores – Reuters