Supervalu Inc. (Eden Prairie, Minn.) has announced it will focus on remodeling its stores, offering local promotions and reducing its debt during its second year of integrating the Albertsons grocery chain into its operations.
Jeff Noddle, ceo of the nation’s third-largest supermarket organization, said, “I'm pleased with our success in year one. This is a marathon and not a sprint.” Supervalu acquired Albertson’s Inc. (Boise, Idaho) in 2006 for nearly $10 million as part of a consortium that included CVS/Caremark Corp. (Woonsocket, R.I.), Cerberus Capital Management L.P. (New York) and Kimco Realty Corp. (New Hyde Park, N.Y.).
In outlining new initiatives, Noddle said the chain would remodel 80 percent of its stores in the next seven years through a $1.2 billion capital-spending plan, the most in its history. In its most recent quarter, when sales slowed, the chain blamed its outdated stores. “We want the food to pop,” said Duncan MacNaughton, the company's executive vp, merchandising and marketing. “We want the store to disappear.”
The company has nearly completed construction of a test store a mile from its Eden Prairie headquarters to experiment with store layout, lighting and design, the first such venture in company history. The test store also houses a kitchen for development of Supervalu private label foods.