retail news in context, analysis with attitude

In Minnesota, the Star Tribune has an interview with Supervalu CEO Craig Herkert, the former Walmart executive who has just completed his first year at the retailing-wholesaling colossus. The story notes that Supervalu’s various formats “have been hit particularly hard by the recession, which has sent shoppers scurrying for deals. Falling food prices in 2009 didn't help matters for food retailers.

“The result: Falling same-store sales, a trend that only got worse for Supervalu in its most recent quarter, despite an uptick in the U.S. economy. Fewer customers have been trekking to Supervalu's stores and they're buying less -- and there's no quick end in sight to the decline.”

According to the story, “Herkert is confident he and his new executive team will turn the tide. About half of his direct reports are new, including Supervalu's head of
merchandising, its chief information officer and its chief marketing officer. The last position seems particularly important. ‘Frankly, we have not had a great marketer who really could help us understand how to build and maintain relevance for our brands,’ he said.”

Other excerpts from the interview:

The economy... “The very challenging macroeconomic environment has been more troubling than I would have expected. Real American consumers have been challenged. It's been well publicized -- double-digit unemployment.”

Private brands... “The key thing is they are a value proposition for the consumer. So when a consumer comes to any one of our stores I want her to be able to make a choice. If she wants to buy a national branded product, I want to have that national branded product at a fair price for her. If however she chooses to want to buy something that is a better value, then I want to have that. We have a great private brand program. Quite frankly we haven't stepped up and really shown off that fact to Mom.”

Regarding plans for the limited assortment Save-A-Lot chain... “Given the state of the economy ... we're not focused today on growth in our traditional retail stores.”
KC's View:
The question that some of us have about Supervalu is whether the new leadership there is so focused on one kind of customer patronizing one kind of store in one kind of economic environment that the company could be caught flat-footed if things get better, or just go differently from how management prognosticates.