Schnuck exec honored by produce pub
ST. LOUIS A weekly newspaper serving the produce industry has given a top award to a Schnuck Markets executive.
The Packer named Schnucks VP produce and floral Michael O’Brien the 2009 “Marketer of the Year,” Schnucks announced, presenting him with the award at the Produce Marketing Association’s Fresh Summit earlier this month.
O’Brien has worked in the supermarket industry for 37 years, starting at Schnucks as a bagger in 1972, becoming a store manager in 1983 and division manager in 1990. He has served in his current position since 2001.
Schnucks said O’Brien had taken an “active role” in promoting produce consumption and was a member of a number of industry organizations. He is chairman-elect of the PMA’s board of directors and served as chairman of the Produce for Better Health Foundation in 2007, promoting that organizations “5 a day, Fruits & Veggies – More Matters” campaign to promote the eating of fruits and vegetables. Produce Merchandising magazine also named him “Retailer of the Year” in 2004.
Supervalu unveils aggressive expansion of its Save-A-Lot discount food division
EDEN PRAIRIE, Minn. Responding aggressively to the rapid growth of discount food retailer Aldi, Supervalu is planning a massive expansion of its Save-A-Lot discount food-store division.
Save-A-Lot will double in size over the next five years, Supervalu CEO Craig Herkert told investment analysts Tuesday in a conference call following release of the company’s disappointing second-quarter results. Over that time, the value-driven Save-A-Lot division will expand grow from its current store count of 1,180 units to roughly 2,400 stores, he said.
At press time, it was unclear how many of those smaller-scale, tightly merchandised stores were likely to be franchise units. Currently, roughly 75% of Supervalu’s Save-A-Lot stores are licensed to franchise owners.
Herkert was quick to point out that the move “is not an abandonment of traditional grocery,” according to a report in today’s The Wall Street Journal. And he pointed out that the company’s 1,200 traditional and premium supermarkets — 850 of which include in-store pharmacies –would remain the core of Supervalu’s business.
The pre-emptive expansion strategy for Save-A-Lot could help Supervalu counter the increasing threat posed by its fast-growing, European-based rival as both companies seek to capture lower- and middle-income consumers hit hard by the recession. Aldi, the Batavia, Ill.-based U.S. division of the German Aldi supermarket giant, opened its first U.S. store in Iowa in 1976. But in recent years, the chain has staged a determined assault on the eastern half of the country, with roughly 1,000 small-box, value-priced food stores now open in 29 states.
Supervalu, for its part, reported net earnings of $74 million for the fiscal 2010 second quarter, compared with $128 million in the same period last year. Sales were also down, to $9.5 billion from $10.2 billion the previous year.
“Consumer purchasing behavior, deflationary pressures, as well as our decision to make meaningful investments in price and promotions significantly impacted our second quarter sales and margins,” said Herkert. “As a result, earnings were lower than the prior year, generally in line with our expectations, and slightly better than analysts’ consensus of $0.33 per share as reported by First Call.”
On the plus side, Herkert said Supervalu had reduced its total debt $340 million since the end of fiscal 2009. “As we move into the last half of the year, we will place intense focus on in-store execution and merchandising programs,” he said. “I am confident that our strategy to provide shoppers with enhanced value and other changes we are now making, will allow us to compete more effectively.”
Nevertheless, Supervalu, along with many other supermarket retailers, will face uphill sledding over the next several quarters as the nation struggles to restore consumer confidence and lost jobs. Herkert predicted the company would see a 4% drop in same-store sales over the course of fiscal 2010, and would post full-year sales of approximately $41 billion.
“We are taking ten cents off the top of our previous fiscal 2010 earnings guidance range as the economic outlook in the back half of the year and its impact on consumers has become clearer,” he said.
“Capital spending is projected to be approximately $700 million, which will include 65 to 70 major store remodels, 25 to 30 minor remodels, 3 new traditional supermarkets and 45 to 55 new hard discount stores, including 20 to 25 licensed stores,” the company reported yesterday.
Hannaford receives Climate Champion award
SCARBOROUGH, Maine An organization that promotes efforts to fight global warming has given a national environmental award to a New England supermarket chain.
Hannaford Supermarkets received Portsmouth, N.H.-based Clean Air – Cool Planet’s “Climate Champion” award at a ceremony in Boston last week.
“Hannaford Supermarkets has long been a leader in recognizing the need for action on climate change,” Clean Air – Cool Planet CEO Adam Markham said in a statement. “Its recent opening of the most environmentally advanced supermarket in the country is a capstone to this history of corporate climate action.”
Markham was referring to the chain’s new store in Augusta, Maine, which was the first supermarket to receive the Leadership in Energy and Environmental Design certification from the U.S. Green Building Council. Hannaford said the store is expected to use 59% less energy than a typical supermarket of comparable size and amenities. The chain also has installed photovoltaic solar panels at five of its stores, equipped its trucks with energy-saving technology and plans to build a wind turbine at its distribution center in Schodack, N.Y.