Supervalu Ramps Up Private Labels

Supervalu said last week it is accelerating the development of a premium line of private-label entrees and side dishes to take advantage of the consumer shift to trading down. Speaking to investors at a conference sponsored by Lehman Brothers here, Jeff Noddle, chairman and chief executive officer of the Minneapolis-based company, said the new line will be introduced nationally in late

NEW YORK — Supervalu said here last week it is accelerating the development of a premium line of private-label entrees and side dishes to take advantage of the consumer shift to trading down.

Speaking to investors at a conference sponsored by Lehman Brothers here, Jeff Noddle, chairman and chief executive officer of the Minneapolis-based company, said the new line will be introduced nationally in late summer with a launch “as significant” as the company's launch last month of the Wild Harvest line, “and it will encompass more parts of the store,” he added.

He said the Wild Harvest launch — under the theme “Organify Your World” — “has been one of the best marketing programs we've ever run, and sales are proving that to be true.”

With food price inflation running at 3% to 4%, Noddle said Supervalu moved “a little quicker than initially planned” on the Wild Harvest introduction to get maximum benefit from the consumer shift toward more private brands as a way of dealing with escalating food prices.

He also said he expects private brands at Supervalu-owned stores to move “over time” toward 20% penetration. At the time Supervalu acquired more than 1,100 Albertsons stores in mid-2006, private-label penetration for the combined companies was at 15%, Noddle pointed out.

Having rationalized 100 different corporate labels down to about 25 last year, Supervalu established a goal of 17% penetration by the first quarter of fiscal 2010 — about a year from now — Noddle said. Private-label penetration stood at just under 16% at the end of the company's fourth quarter in February, he added.

In other comments to conference attendees, Noddle said it is still too early in the remodeling process for Supervalu to get a good read on the sales boosts it's likely to get from ongoing remodeling activities. However, the company is very satisfied with the 7% increases in identical-store sales it has seen at the 85 stores that have cycled for a least a year past their remodelings, he noted.

Supervalu plans to complete 105 major remodels this year, he said, including 83 former Albertsons properties (25 Jewel-Oscos, 21 Shaw's and 37 Albertsons in Southern California).

See more about Supervalu in its Company Profile: supermarketnews.com/profiles/supervalu [4]