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All Supervalu segments see sales growth

Supervalu executives repeatedly used the word “pleased” to describe the company's financial performance in a call with analysts on Wednesday.

And Supervalu has reason to be satisfied; all three business segments — wholesale, Save-A-Lot and traditional food retail — grew in the third fiscal quarter that ended Nov. 29.

“We are sticking to and executing upon the basics much better than in the past. Our playbook is focused on fundamentals which is driving a renewed sense of energy and excitement within the company,” CEO Sam Duncan said.

Supervalu had $4.2 billion in sales, a 4.8% increase from the same quarter last year. Net earnings were $79 million, and net earnings from continuing operations were $12 million.

The company found a way to grow the seemingly tough wholesale segment by getting the business of Northwest chain Haggen, which announced it would soon be expanding from 18 stores to 164 after an acquisition from Safeway and Albertsons. Safeway and Albertsons are working on a divestment process set by the FTC in order for the two large chains to merge. Supervalu also agreed to purchase two retail stores.

Starting in February and ramping up through the first quarter, Supervalu will supply 64 Haggen stores in the Northwest through its Tacoma distribution center. About 40 to 46 of these stores will be stores formerly operated by Safeway or Albertsons. In addition, Supervalu will be providing transition services to all of Haggen's stores. 

Sales from Supervalu’s wholesale business overall were $1.96 billion in the third quarter, a 2.4% increase.

On the deep discount side of the business, Save-A-Lot celebrated an eighth consecutive quarter of positive identical store sales. Identical store sales were 6.9% overall and 8.5% in corporate stores, which the company attributes in part to momentum of meat department and produce department enhancements, and a focus on product quality and merchandising.


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Supervalu expects to add 65 new Save-A-Lot stores this year, and more in the next fiscal year.

The traditional retail banners identical store sales were also up by 2.3%. Thirteen more stores were remodeled this quarter.

Duncan said adjusting seasonal assortments to bring in more back-to-school and Halloween items was a “big win.” More pet and baby products and new merchandising increased sales in those categories as well.

“Our stores now better reflect today's customer, the way they shop and the products they want,” said Duncan.

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