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Supervalu announced yesterday a series of strategic moves, including the creation of a new private brand program using the name Essential Everyday, which eventually will replace all of the various private label programs used by the company’s various retail banners. According to the announcement, “With the introduction of the Essential Everyday brand, which will roll-out in phases, the company will be able to realize significant savings through packaging and taking a more national approach to advertising and promotions. The company also plans to expand its Shoppers Value entry price-point private brand line and will be launching or relaunching 80 new items in the coming months.”

In addition, Supervalu plans “the addition of the Save-A-Lot Today brand to its private brand program. The new Save-A-Lot Today brand is an opening price point line with most products priced under $1 to help its value-focused customers stretch their dollars.” Save-A-Lot Today will be carried in the company’s Save-A-Lot hard-discount, limited assortment stores.

CEO Craig Herkert told an investors conference, “"We are focused on acting as one company, working toward a common goal of delivering increased value to all of our customers and meeting their needs neighborhood by neighborhood."

Supervalu said that it plans to continue its “national expansion of Save-A-Lot ... growing Save-A-Lot by 160 new stores in fiscal 2012, keeping the company on track to reach its goal of building a network of more than 2,400 stores by 2015.” The company noted that the “Save-A-Lot portfolio includes a blend of 30 percent corporate-owned and 70 percent licensee-operated stores. This multiple-ownership model supports the company's aggressive growth strategy, while helping it conserve capital.”

At the meeting, the company's senior management team outlined other initiatives the company is undertaking “to reverse sales declines at its traditional retail banners and get them back on the path to growth.” The efforts underway include:

• “Sharpening the traditional retail banners' value proposition through a fair everyday pricing plus promotion strategy.”

• “Enhancing fresh offerings, which includes providing customers with more locally grown produce, introducing a new ‘Just Baked’ program to ensure the availability of fresh-baked breads and rolls throughout the day, and improving deli department offerings with new products like grilled chicken.”

• “Developing and maintaining a portfolio of compelling private brand products that differentiate our retail outlets from our competition and provide more competitive value for customers.”

• “Better matching store assortment and format to the needs of each neighborhood.”

• “Providing a more hassle-free experience both in-store and online.”
KC's View:
These all seem like smart moves, though in the words of the old English proverb, “There's many a slip 'twixt the cup and the lip.” So there is much work to do.

I guess that one question I would ask is whether a centralized and consolidated private label program is at odds with a “neighborhood by neighborhood” approach. I’m sure it necessarily is - if the rest of the store is a needs-based and compelling experience, then there is no reason that the private brand has to have the same name as the sign over the store. But it is something to keep in mind.