Herkert Optimistic Despite Supervalu Sales Declines

Despite lower sales, Supervalu said Tuesday it is pleased with the progress it is making on improving promotional spending and expense controls, though it may take up to 18 months for store-level improvements to show up in reported financial results.

MINNEAPOLIS — Despite lower sales, Supervalu here said Tuesday it is pleased with the progress it is making on improving promotional spending and expense controls, though it may take up to 18 months for store-level improvements to show up in reported financial results.

According to Craig Herkert, president and chief executive officer, the focus at Supervalu will be on installing new merchandising programs within each store, touching more than 300 locations this year. Analytics teams are working with ad personnel to not only improve pricing initiatives but also to address other parts of the store experience “so the consumer can make a choice to shop at our stores based on more than just the weekly ad,” he explained.

The company reported net income for the third quarter and year-to-date, compared with losses in both periods a year ago. Sales fell 9.4% for the quarter to $9.2 billion and 7% for the 40 weeks to $31.4 billion, while identical-store sales for the quarter dropped 6.5% — 2% attributable to lower customer counts and 4.5% to a drop in average basket size, the company pointed out.

That downward trend has continued into the fourth quarter, Pamela Knous, executive vice president and chief financial officer, said.

Herkert said, “I am not satisfied with the same-store sales performance, but I believe our company is gaining momentum on key initiatives and behavioral changes designed to improve sales in fiscal 2011 and beyond.”

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