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Publix adds Blockbuster kiosks to its stores

BY Anna Mcgrath

NEW YORK Publix announced the installation of its Blockbuster Express DVD-rental kiosks in central Florida to offer shoppers a convenient and inexpensive way to rent DVDs.

DVD rentals are available for $1 a night and with no membership sign-up required. Each kiosk can hold approximately 950 movies and customers can rent up to three movies at a time, said Michael Cecchini, an account manager for NCR, which is responsible for the Publix kiosks.

Ceccini also explained that the machines have been around for several years, but the Blockbuster branding is new. Once called “The New Release,” there are about 2,000 of them nationwide with plans to have a total of about 10,000 by the end of the year. There are kiosks in about 425 Publix stores nationwide, with plans for another 150 locations.

Advancing technology, the down economy and the convenience of being able to rent and return DVDs at places people visit on a regular basis has a lot to do with the popularity of movie-rental kiosks, said Ceccini.

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Herkert seeks to turn around Supervalu after grim first quarter

BY DSN STAFF

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.

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Supervalu sales, earnings decline

BY Allison Cerra

MINNEAPOLIS Supervalu reported that its net sales for the first quarter of fiscal year 2010 dropped 4.5% from the year-ago period.

The grocer said Tuesday its net earnings dropped significantly to $113 million, or $0.53 per diluted share, from $162 million, or $0.76 per diluted share, during first quarter 2009.

“As we noted in our press release of June 24, our first quarter results reflected the continuing difficult economic environment as well as investments we are making in price and higher levels of promotional spending. As a result, sales and margins in the first quarter were weaker than originally expected. We anticipate no near-term change in consumer spending patterns and we will operate our business accordingly,” said Craig Herkert, CEO at Supervalu.

First quarter retail food net sales were $9.9 billion, compared with $10.3 billion last year, a decrease of 4.3%, primarily reflecting the impact of identical store sales of negative 3.2% and previously announced store closures. The identical store sales performance primarily results from a challenging economic environment, heightened competitive activity and additional investments in price and promotions. Retail square footage decreased 3.2% from the first quarter of fiscal 2009. Excluding the impact of store closures, total retail square footage increased 0.8%, compared with the first quarter of fiscal 2009.

Click here for the full financial results.

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