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Supervalu earns high marks for corporate culture

BY Doug Desjardins

Corporate culture is a fairly new term that encompasses how a company treats its employees and the general tone it sets around the workplace. And the example set by such major corporations as Costco and Disney has established some precedents and standards on what a company should and shouldn’t do.

And while Supervalu still is a relatively new name on the national retail scene, it quickly is establishing itself as a company to emulate. It received a big boost in that direction last month when it was given a rating of 100 on the Human Rights Campaign’s sixth annual Corporate Equality Index, becoming the only major grocery retailer to receive a perfect rating.

“As a leading retailer, it’s critical that our company mirror our customer base—a richly woven tapestry of diverse cultures,” said Supervalu chairman and chief executive officer Jeff Noddle. “Embracing diversity and creating a culture of inclusion is a key component of our business strategy and is essential to achieving our goal of being the best place to work, shop and invest in the grocery retail industry.”

To that end, Supervalu recently created a diversity and inclusion department to address those issues and named a vice president of diversity and inclusion to head it. It also founded a diversity and inclusion council, a group comprised of several senior executives who meet on a regular basis to form and implement new strategies.

The company also has renewed its commitment to its employee-based work groups—or affinity groups—which now number upward of 20 across the company. They include PROUD and In-Sight to handle issues for gay and lesbian workers, the Black Leadership Network and the Hispanic Mentoring Group.

“At Supervalu, we’re committed to deepening our understanding of diversity and inclusion, and building a diverse culture that values, encourages and respects the ideas, experiences and contributions of all associates,” said Supervalu vice president of diversity and inclusion Darnell Allen. “Our efforts range from the workplace to the in-store shopping experience to the partnerships we have with our vendors and suppliers.”

Earlier this year, Supervalu received the Supermarket News 2007 Champion of Diversity Award for its ongoing efforts to increase employee diversity and tailor its stores to local demographics. In acknowledging the award, Supervalu executive vice president of human resources Dave Pylipow said, “it’s essential to our long-term success that diversity becomes a key component of our business strategy that is well-understood and embraced throughout our entire organization.”

The broadening of its diversity efforts comes at a time when Supervalu has broadened its horizons and expanded from a regional retailer and distributor to a national chain with stores ranging from Boston to San Diego. Its purchase of the premier properties from Albertsons last year has given it a heavy concentration of stores in California, where a large Hispanic population makes its recent efforts to embrace issues of diversity even more important.

As part of that effort, Supervalu stages in-store events that celebrate the culture and lifestyle of both its workers and customers. During Black History Month in February, its Albertsons, Jewel-Osco and Acme stores staged a “Taste of Black History” month. The event featured in-store cooking demonstrations and product sampling with the largest number of African-American manufacturers and distributors taking part in the event since it was established in 2001.

“African-American entrepreneurs have played a significant role in this country’s economic success, which is why Supervalu is proud to celebrate their accomplishments by showcasing the products of our African-American business partners in our stores,” Pylipow said.

Supervalu also has established itself as a place where women hold a larger number of upper management posts than most retailers. In August, six of its top female executives were named in a 2007 “Top Women in Grocery” list, the most by any single supermarket retailer.

The list included executive vice president and chief financial officer Pamela Knous, Supervalu executive vice president and president and chief operating officer of supply chain services Janel Haugarth, Shop ‘n Save president Marlene Gebhard, ACME president Judy Spires, retail West senior vice president of merchandising and marketing Sue Klug and Shaw’s Mountain region vice president of operations Peggy Pfaltzgraff-Holden.

“These women work hard day-in and day-out to serve our customers and our associates better than anyone else in the industry,” Noddle said. “Their knowledge and expertise make them invaluable assets to the company, and we are privileged to have them as part of our leadership team.”

Employees also are encouraged to help out the local communities where they work and take part in the many charities that Supervalu supports to the tune of $72 million per year. In May, workers donated more than $19,000 of the $66,000 Supervalu raised for its “Chip-In” initiative to help child welfare and adoption agencies place children in nurturing homes.

Supervalu’s workers also are among the best-paid grocery employees in the country and receive a full slate of benefits, including health insurance and retirement plans. That’s due in large part to the fact the company is union-friendly, with approximately 117,000 workers belonging to the United Food and Commercial Worker ’s union alone.

But that also comes with challenges. Supervalu recently wrapped up months of negotiations with the UFCW in Southern California in July to secure its workers a new, four-year contract that features improved health insurance benefits and salaries. Supervalu was instrumental in negotiating the contract and averting a potential strike like the one that crippled Albertsons and other supermarket retailers in the region in 2003 and 2004.

When the contract was signed this summer, Supervalu stated that—in addition to avoiding a strike—it was glad to provide its newest employees with a boost in wages and improved benefits. “From our perspective, the No. 1 thing wasn’t one piece but, rather, the whole contract,” said Supervalu spokeswoman Stephanie Martin. “We really were excited to be able to give our workers a raise.”

The new contract also gave employees an improved health plan with a “health reimbursement account” that employees can use to pay medical costs, and it provides 100 percent coverage for preventive care, such as annual doctor visits for physicals, such exams as mammograms and screenings for prostate cancer. And it provides for periodic wage increases over the four-year term of the contract.

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Fred’s reports both monthly and quarterly record sales

BY Allison Cerra

MEMPHIS, Tenn. Fred’s Inc. reported record sales for the five-week and eight-month periods which ended Oct. 6, 2007.

The company said Friday that its total sales for the month increased 2 percent to $161.4 million compared to the same period last year. Total sales for the year-to-date period increased 5 percent to $1.157 billion.

Same store sales for the month rose 1 percent on top of a 5 percent increase in September last year. On a comparable store basis, sales increased 1.3 percent through the first eight months of fiscal 2007 compared with a 2.7 percent gain in the year-earlier period. Same-store sales are a key predictor of how well the company performs in stores that have been open for several years, and how well the newly open stores will do in the future.

“September sales came in at the low end of our forecasted range of a 1 percent to 3 percent increase, affected by unusually warm weather across our markets and the disruption caused by the updating of 98 stores under our refresher program,” said Fred’s Stores chief executive officer Michael J. Hayes. “We look forward to finishing our refresher program in October with the last 60 stores and to a better economic environment for our customers going forward, as the benefits of the minimum wage increase and the focus of Federal Reserve Board on the credit crunch take hold.”

Fred’s opened four stores at the end of September, bringing total store openings to 22 for the year-to-date period. These new store openings have been balanced by the company’s decision to close underperforming stores. In the remaining months, Fred’s Stores said that it plans to open 14 additional stores, with no further planned closings, which will result in a net increase in stores of 2 percent for the year.

Fred’s Inc. operates 702 discount general merchandise stores, including 24 franchised stores in the southeastern United States.

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Target to open another 61 stores nationwide

BY Allison Cerra

MINNEAPOLIS Target announced that it will be opening an additional 61 Target stores, the company said Friday.

The stores, which will all open Oct. 14, will open in 22 different states. The majority of the stores are making their debut in Arizona, California, Ohio and Texas.

In addition to offering the latest in trend-right merchandise, Target also brings a 44-year tradition of community involvement. The retail chain commits itself to local communities donating more than $3 million each week to area nonprofit organizations, becoming involved in local volunteerism efforts through Target Volunteers, and orchestrating other special projects that help meet area social service, arts and education needs.

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