Herkert seeks to turn around Supervalu after grim first quarter
MINNEAPOLIS Two months into his new position, Craig Herkert, Supervalu CEO and former Walmart executive, took action on Tuesday, firmly stating that Supervalu’s current performance metrics “are not acceptable,” and setting out a multi-pronged plan designed to refocus the many-bannered supermarket chain and laying the baseline for long-term growth. “Our issue is execution,” Herkert told analysts Tuesday morning.
And execution is an issue across all facets of the business, Herkert said — customers perceive Supervalu as too high-priced, and only take advantage of the chain’s too-deep promotional items; and vendors perceive Supervalu as too complex, perhaps choosing to focus their retail allotments against easier-to-work-with competitors. “Going forward, roles and responsibilities will be clearly defined,” Herkert said, and operations executives will be held accountable.
For example, now all of the supermarkets operating under the Supervalu umbrella will now report up to Pete Van Helden, EVP of retail operations at Supervalu. “I think just getting clarity [around] reporting relationships … will increase and improve our ability to make decisions efficiently.”
As an example of that, Supervalu two weeks ago brought all of its specialty banners —bigg’s, Cub Foods, Farm Fresh, Hornbacher’s, Shop ‘n Save and Shoppers Food & Pharmacy — all under the guidance of Brian Huff, SVP specialty retail, who reports directly to Van Helden.
Also as part of that operational streamlining initiative, Supervalu sold its Utah-based Albertsons operations on the same day of the call to Associated Food Stores. The move was made because Utah was not a core market, Herkert said.
As part of Tuesday’s conference call, Herkert identified a number of areas where Supervalu will seek improvements. First, the company will be looking to funnel its focus wholly onto the consumer. And beyond actual shoppers, one of those key customers is the independent retailer supplied by Supervalu, Herkert added. Pricing perception among consumers will also be a key focus going forward.
Outside of Save-A-Lot, which operates on an everday-low-price strategy, Supervalu’s banners pursue a high-low price strategy.
“Our price position has hurt us,” Herkert said. “Particularly in this economy.”
Herkert stressed that perception will change, just not right away.
“Customer perception does not change on a dime,” he said. “What were working toward is fixing the value proposition so that our everyday prices are more meaningful to her.”
As part of scaling its high-low pricing structure a bit lower in an effort to better meet customer expectations, Supervalu will also be reviewing its promotional activity. Herkert noted that Supervalu’s current promotional activity doesn’t do anything to improve pricing perception among shoppers, nor does it improve loyalty.
And while Supervalu’s pricing position needs to be adjusted, marketing is a strength for the company, Herkert said.
Ross Valley Pharmacy develops medication management, diabetes counseling initiatives
NEW YORK There are a couple of items of note with Ross’ announcement. First is the value of the pharmacist. A Kaiser Family Foundation poll released last week found that almost half of Americans are putting off healthcare costs, with 33% of Americans reporting that they’re replacing a possible doctor’s office visit with a trip to the pharmacy to purchase an over-the-counter solution. A higher incidence of OTC use combined with a lower incidence of consultation with a family practitioner could result in some pretty serious adverse events without the intervention of a MTM-minded pharmacist. To be sure, OTC medicines are proving to be very valuable to consumers during these recessionary times, but the fact is that nonprescription medicines are still medicines, and it’s not only important to use as directed, but also to speak with a pharmacist around a patient’s entire drug/supplement regimen.
Second, it further substantiates several trends — a trend toward utilizing Internet technology to help manage healthcare conditions; a marriage of sorts between that Internet interoperability and smart phones; and the desire to have a privacy-protected online home around those healthcare conditions.
TheCarrot.com site provides tools for tracking a variety of topics including health, nutrition, fitness, and medicines all within a layman-friendly calendar format. Through the free, anonymous service, consumers can achieve a more comprehensive view of their health conditions. TheCarrot.com also allows users to employ a cell phone or iPhone to upload healthcare datapoints.
Gaiam brings three classics films home for the holidays
BROOMFIELD, Colo. Gaiam is bringing together three classic holiday films from ITV Global with the DVD releases of festive films starring the great talents of Henry Winkler, Jason Gedrick, Rhea Perlman and Tom Arnold.
“The Most Wonderful Time of the Year,” “The Christmas Choir” and “Moonlight Mistletoe” debuted on the Hallmark Channel in 2008, and thanks to Gaiam, the films are coming to DVD for the first time on Oct. 13.
“We are thrilled to be working with ITV Global to bring all the fun and joy of these great new Christmas classics to consumers nationwide,” said William S. Sondheim, president of entertainment and worldwide distribution for Gaiam. “These quality films truly embrace the warmth and heart of the holidays and will surely help bring the whole family together this season.”