Supervalu Inc
SUPERVALU is one of the largest companies in the United States grocery channel.
SUPERVALU conducts its retail operations under three retail food store formats:
extreme value stores primarily under the retail banner Save-A-Lot; price superstores,
under the regional retail banners of Cub Foods, Shop ’n Save, Shoppers Food Warehouse
and bigg’s; and supermarkets, under the regional retail banners of Farm Fresh,
Scott’s and Hornbacher’s. As of the close of the fiscal year, the company conducted
its retail operations through 1,483 stores, including 821 licensed extreme value
stores. SUPERVALU also provides food distribution and related logistics support
services across the United States retail grocery channel. As of the close of the
fiscal year, the company served as the primary grocery supplier to approximately
2,470 retail food stores in 48 states, in addition to its own regional banner
store network, and as a secondary supplier to approximately 660 stores.
SUPERVALU is focused on retail growth through targeted new store development,
remodel activities, licensee growth and acquisitions. The company’s plans also
include leveraging its distribution operations by providing logistics and service
solutions through an efficient supply chain, which will allow it to affiliate
new independent customers and expand its recently launched Advantage Logistics
third party logistics business. Consolidation opportunities in the food distribution
industry may provide another avenue for growth.
The company’s business is classified by management into two reportable segments:
Retail food and food distribution. Retail food operations include three retail
food store formats: extreme value stores, regional price superstores and regional
supermarkets. The retail formats include results of food stores owned and results
of sales to extreme value stores licensed by the company. Food distribution
operations include results of sales to affiliated food stores, mass merchants
and other customers, and other logistics arrangements. Management utilizes more
than one measurement and multiple views of data to assess segment performance
and to allocate resources to the segments.
Competition
The company’s retail food and food distribution businesses are highly competitive.
The company believes that the success of its retail food and food distribution
businesses are dependent upon the ability of the company’s retail food operations,
and the retail food stores with whom it is affiliated as a supplier, to compete
successfully with other retail food stores in a consolidating market. Principal
competition comes from local, regional and national chains operating under a
variety of formats that devote square footage to selling food (i.e. supercenters,
supermarkets, extreme value stores, membership warehouse clubs, dollar stores,
drug stores, convenience stores, various formats selling prepared foods, and
other specialty and discount retailers), as well as from independent food stores.
The company believes that the principal competitive factors that face its owned
stores, as well as the stores owned by retailers it supplies, include the location
and image of the store, the price, quality and variety of products, and the
quality and consistency of service.
The food distribution business competes directly with a number of food wholesalers.
The company believes it competes in this supply chain on the basis of product
price, quality and assortment, schedule and reliability of deliveries, the range
and quality of services provided, service fees, and the location of distribution
facilities.