Supervalu Sees 'Orderly Pass-Through' of Inflation

Although it is too early to say exactly how consumers will react to ongoing price increases in the grocery sector, Jeff Noddle, chairman and chief executive officer of Minneapolis-based Supervalu, said he expects food retailers to pass their cost increases on to consumers.

NEW YORK — Although it is too early to say exactly how consumers will react to ongoing price increases in the grocery sector, Jeff Noddle, chairman and chief executive officer of Minneapolis-based Supervalu, said he expects food retailers to pass their cost increases on to consumers. "Inflation has been passed through quite orderly in 2007, and we expect the same this year," he said at the Bear Stearns Retail, Restaurant & Consumer Conference here. Even Wal-Mart, he noted, seems to pass through its costs increases eventually. Still, he said, consumers are "very cautious, and it's very hard to predict because there's still a lot of inflation in the pipeline." He also said that even though Supervalu said its comp-store sales would be flat for the fourth quarter, "the majority of markets were positive," and most of the negative pressure can be attributed to specific competitive activity. On Monday, the company projected same-store sales gains of 1% to 2% for the current fiscal year, which just began last month.

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