In a deal the companies said would result in better customer service, reduced costs and the potential to facilitate quick expansion to value-added offerings like meal kits and click-and-collect, Jerry’s Foods is outsourcing its technology network to its wholesaler, Supervalu.
Jerry’s, a 50-store retailer based in Edina, Minn., that operates food stores under the Cub Foods, County Market, Jerry’s Foods and Save-A-Lot brands, as well as liquor and hardware stores, is expected to flip its first store to Supervalu’s network services early next month, with plans to complete all stores by early November, said Jeff Miller, Jerry’s chief information officer.
“The overwhelming No. 1 reason was so that we could concentrate on what we do well, which as a medium-sized retailer is focusing on our stores and executing correctly,” Miller said.
Miller said increasing technology demands on Jerry’s were threatening to overwhelm its IT staff of five. The offering also will save the company around 15% on its costs, he said.
“We needed someone who understood the business, and Supervalu has the people and the bandwidth and the purchasing power to be able to provide that. So that’s why we said, ‘let’s try this,’” Miller explained. “It’s the same reason we buy Nabisco through them. We could go and buy it direct ourselves, but Supervalu can execute that wholesale portion better than we can.”
For Supervalu, the network offering leverages technologies it already has developed for its own retail brands, Chad Mead, Supervalu’s chief technology officer, said. Packaging that as an offering to independent customers is a new endeavor for the wholesaler, but it joins more than 200 other value-added services Supervalu can offer its customers, ranging from negotiated deals on cleaning and armored-car services to equipment and decor programs.
The wide-area network that will service Jerry’s will provide multipoint connectivity, provides a staffed help desk and will allow the company to deliver services back to stores. Miller said this infrastructure would allow the company to quickly pursue other value-added services from Supervalu like a meal kit program integrating products and video, a click-and-collect internet shopping option, and what Miller called “mundane” but useful offerings like better sign-printing and electronic shelf tags.
“The 24/7 help desk is a big deal for us. Of our stores there are about 25 of them that do a pretty hefty volume and every hour they are without service costs us a lot of money, and a lot of time for the people at the stores,” Miller explained. “Our long-term goal is to be able to have a single, seamless help desk number that’s staffed by Supervalu but that can come back to us quickly. … If I could save five hours per store per week, that would be huge.”
According to Mead, an increasingly technology-dependent and competitive food retailing climate has pressured independent food retailers to distinguish themselves behind service to customers. Similarly, wholesalers need to distinguish themselves behind better service to their customers, he said.
“One of the things we’ve been looking at is how competitive as a market it is with everyone wondering what Amazon-Whole Foods is going to mean,” he said. “Part of the culture for Supervalu is to provide an improved competitive landscape for independent retailers. They’re an important part of our business and we believe we can help them to provide better service to clients.”