A focus on perishables at Save-A-Lot is driving results for parent Supervalu.
Save-A-Lot sales of $1 billion for the fiscal second quarter ended Sept. 6 increased by 8% from the same quarter last year, the company said Thursday. Overall sales for Supervalu, including its retail and independent segments, totaled $4 billion, a 1.8% increase. Net earnings of $31 million decreased by 23% as compared to the same period a year ago but were within analyst expectations.
In a call with analysts, Supervalu CEO Sam Duncan said sales at corporate and licensee Save-A-Lot stores were the highest on record. Identical store sales at Save-A-Lot improved by 6.5% and corporate stores within that network had 8.2% identical store sales increases. Basket size was also up 1.8% for the quarter.
Duncan attributed the sales growth to meat and produce performance. Supervalu has rolled out a saw meat-cutting program to all stores.
“We are now working on more deeply integrating meat into marketing and promotional cadence which given the importance of the center look plate protein to the Save-A-Lot customer, we would expect to provide us a competitive advantage in the hard discount space,” Duncan said.
Supervalu is investing in Save-A-Lot private label brands and plans to update the packaging of 1,000 SKUs by the end of the fiscal year, he added. The company expects to open 65 new Save-A-Lot stores for 2015.
Sales in the retail division improved slightly to $1.1 billion, while independent retail sales decreased by 1.1% to $1.8 billion. The independent sales decrease was attributable primarily to lost accounts.
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