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.
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“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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